Careers in Geosciences Series

Interview with Scott Hector, Hobby Energy

Published
American Association of Petroleum Geologists (AAPG)

Being innovative is a survival strategy that serves geoscientists well. Welcome to an interview with Scott Hector, who became passionate about geology at a young age, and whose flexibility in the ups and downs of the industry will inspire geoscientists.

Question: What is your name and your background?

<b>Scott Hector</b><br />Hobby Energy
Scott Hector
Hobby Energy
Answer: Scott Towers Hector. I was born in Albany, California, in 1948. I was born prematurely and had a non-genetic cleft-palate. The condition was greatly improved by an operation at the age of 2, which was one of the first times the operation was performed at such a young age (prior to that, the age was usually 12 and required multiple procedures). I was raised on a 200-acre ranch in the Santa Cruz Mountains (i.e., 50 miles south of San Francisco on the San Francisco Peninsula) near what is now Castle Rock State Park. The rugged country and great rock outcrops spurred an interest in geology. When I went to college, I did a mapping thesis for my Master’s Degree in Geology (1976, University of California at Davis) that was centered on my parent’s ranch.

Question: How long have you been a geologist? What are some of your ups and downs?

Answer: I actually became a geologist at the age of 5. My father had taken our family of four to the California desert during the summer. We stopped for lunch at a restaurant near Palm Springs. I saw a glistening rock in the gravel on the parking lot and picked it up. The rock burned by hand and I started to cry. My dad picked me up and carried me into the restaurant. They had a small knick-knack store in the eatery, and my dad bought me a small box of California rocks that was designed for small children. I fell in love with that box, even sleeping with it at night after we got back to the ranch (so the story goes, anyway).

The answer you want: I have been in the oil and gas industry for over 40 years. I was hired by Texaco when I had turned in my first draft of my thesis in 1974. I finished it during vacation in 1976. Dr. Eldridge Moores put in a good word for me and got me that first job (and also badgered me to finish by thesis!). I only stayed there a few years, and then was wooed away by Jim Roth, himself a former Texaco man. I worked for mostly small companies after getting my feet wet with super-small Carlsberg Petroleum in Los Angeles. Carlsberg went out of business when the owner was killed in a hunting accident (he fell off a cliff trying to carry the head of a rare mountain sheep down a steep mountain trail), and I then joined Great Basins, again with Jim Roth, where I lasted for 6 months (I was told I should leave due to the company being in bad shape, and went to work for Champlin Petroleum, the oil and gas arm of Union Pacific Resources). This pattern continued throughout my career, which meant having 12 jobs in the 44-year span. The longest I have lasted has been with my present company, Hobby Energy, where I have been a partner since 2005. While the history of my career has had many up and downs, I would not trade it for the security of a large corporation. Having the freedom to direct your own ship has become important to me. At Hobby Energy, I have had a drilling company that backed me and we found some natural gas pools. During the world economy crash of late 2008-2009, business was bad and I re-invented myself and Hobby as a company to go to for analysis of the minerals beneath proposed solar and wind farm projects. The background of myself and Karen Blake, senior geologist, was perfect for analyzing the oil and gas potential, or lack thereof, under dozens of proposed renewable energy projects. I still have my heart in oil and gas prospect development and attempt to do that with partner companies.

Question: What was my experience as an operator?

Answer: I assume you mean as an oil and gas company operator, not a phone operator (once again, my sense of humor betrays me!). Most of my work as an Operator was raising money with small investors and drilling for new pools of natural gas in the Sacramento Basin of northern California. I have had some good luck there, but the finds are usually small and do not last long. At present, natural gas prices are depressed and activity in the basin is extremely low. I found most of the gas in the 1990’s, when the basin would see over 100 wells a year. In recent years the number of wells drilled has been 3. Because of the lack of business in the Sacramento Basin, the drilling company that backs me had me change my business emphasis from natural gas prospect development to consulting in Mineral Remoteness Opinions. We have developed a niche in this business, starting in 2007. Sorry that this answer is similar to the answer of the previous question.

Question: What is Mineral Remoteness?

Answer: In California and many states of the union, the mineral rights can be owned by someone who does not own the surface rights. Thus, problems can ensue when a solar or wind farm company wants to build a project. Usually these companies will either acquire the surface rights or come to an agreement with the surface owner to build a renewable energy farm, but then they still have to deal with the mineral rights owner. The surety company backing the project often wants a geological study on the minerals to assure them that the project can be built and that the mineral owner will subjugate his rights to the surface project. Often that mineral owner will not want to do so until he sees a study. The study at times thus deals only with sub-surface minerals, mainly oil and gas, but at other times the study includes both the surface minerals and the sub-surface.

Most of these projects, especially solar, are built in areas of low relief, usually near or in the center of a valley. Thus, there is almost always sand and gravel at the location. Part of the argument in the study by the geologist is whether or not the minerals present are SO REMOTE that even though they are present that a mine developed to commercialize the resource cannot compete with other mines or quarries that are closer to centers of population.

At Hobby Energy, a large number of the dozens of the projects done for solar power companies has included studying parcels of land for the preservation of rare and endangered species of flora or fauna. In addition to the national Environmental Quality Act, California has passed its own Environmental Quality Act. The regulations set up by CEQA, normally run by the State’s Department of Fish and Wildlife, often require a solar company to set aside 1 to 5 acres of land for every acre of critical habitat that it will destroy with its project. Often, the companies meet this need by finding farmers or ranchers who will agree to continue farming or ranching their property and not develop their land into residences or commercial buildings. The state has set aside funds to pay the farmers for doing this. In such cases, the study is often expanded to include both the surface and sub-surface minerals. In some cases, we have also done projects for state agencies, public utilities and non-profit environmental organizations.

Most or all of this work is done for the solar and wind farm companies without inspection of the grounds (i.e., field work). There is a wealth of material published by the California Geological Survey and the Division of Oil, Gas and Geothermal Resources that can help the scientist doing the study. The state has mapped the occurrence of all of the mines it can and tracked the location of some 35 different commercial minerals (gold, boron, etc.).

Question: What are the opportunities for geologists? Where? Why?

Answer: I understand that almost all states require reports on the Mineral Remoteness to be stamped by a registered professional geologist. California requires this, and so do more than 30 other states. A geologist with more than 5 years of experience and that has had increasing responsibility in his or her career can take that ASBOG test, a multiple-choice test (ASBOG= Association of State Boards of Geology). Once you pass this test and meet a few other requirements you will receive your license to be a Professional Geologist. Most states also offer reciprocity once you have taken and passed this exam in another state.

Once you have the Professional Geologist Registration and have a license in state(s), you qualify to do the Mineral Remoteness Opinions. The insurance (surety) companies that back the development of the solar and wind renewable resource farms need to know that once a solar or wind farm is constructed that no other mineral resource development will be forced upon them, which could cause great damage to them. In other words, the last thing they want is to have a thousand-acre solar farm all constructed and then have an oil company come in and say, we want you to tear out half of your facilities because we want to drill an exploratory oil well, and under state law the mineral estate is stronger than the surface estate, and you have to give us ingress and egress and a reasonable amount of land to drill the well. Our reports can usually bring the two different sides together so that the project can move forward.

Hobby Energy has projects that we have done or have approved to do in California and Utah. We are aware that Oregon and Arizona have similar laws. We have been able to develop relationships with companies that have used us over and over again for their needs. I think that this could be true for other registered geologists in many states. Our expertise and size limits us to a few states in the Western U.S.A. The level of work is parallel to the fortunes of the renewable resource industry. This work is also limited to the areas where solar and wind farms can be developed, limited to areas with a sunny climate and near the electrical grid. In California, the liberal bias towards renewables makes this a business with a bright future.

Question: What is required?

Answer: What is required is that the geologist have the license as a Professional Geologist in a certain state or states. If you are successful to become a Registered Professional Geologist, you might either join a firm or try to go out and work on your own. You will likely need to also have errors and omissions insurance (some of the firms that would hire you may require this- not all of them do). Then, you will need to find companies that may want your services. Marketing is then critical. In my case, I was able to get referrals from landmen who worked in the oil and gas industry but also worked in the solar and wind industries, and they referred me for the work. Some of my reports in the Carrizo Plain area of central California were so well received by the State of California’s Division of Fish and Wildlife that they began to refer companies in need of such reports to my firm.

The report itself may address only the sub-surface minerals if it is only the sub-surface mineral estate (in California, often defined as minerals below the depth of 500’) but at times it might also include surface minerals (especially in the case of saving rare and endangered species under the California Environmental Quality Act). Hobby Energy has had to argue in its reports that surface minerals such as sand and gravel, aggregate, or gypsum CANNOT BE COMMERCIALLY MINED because the site is so remote to population centers that existing mines closer to the same population centers can mine and move the mineral commodity to those centers at a lower cost. In one report we made, the solar power site had gypsum mines at the surface. However, they were not being mined at the time. We showed that these were small gypsum deposits and that they could not compete with much large gypsum deposits elsewhere in the state.

The reports we make often also include the subsurface oil and gas potential. We have done many reports in which it was easy to list all of the dry holes in an area for proposed solar development, such as in the San Joaquin Basin or central California. In one case, we were asked to evaluate the potential for oil and gas within the outlines of an oil field. In that case, the oil companies that controlled the minerals agreed to restrict their activities to drilling islands and allow the solar power company to develop their project. In recent years, we have also had to discuss the potential for fracking of shale resources under or near our study areas. Fortunately, the United States Geological Survey has published reports on the San Joaquin Basin and areas where the possible shale oil plays can work. Most of the reports that we have done in recent years have fallen in areas where the U.S.G.S. says that here is no active pod of source rock. This has helped us to deliver a Mineral Remoteness Opinion that is favorable to the solar farm development idea.

Question: Is this a growing business? What do you predict for the surface?

Answer: Yes, this is a growing business. In states like California, the future mandates of making renewable energy the main source of electricity in the future guarantee much work. States with a sunny disposition, such as Arizona, are also a good area for the future of the work of geologists giving these reports. California is hoping to have a great amount of energy from solar power by 2030, so there are many studies to be made by geologists in the next 12 years and beyond.

Question: Please recommend a few books.

Answer: I am not aware of any books on the subject of Mineral Remoteness Opinions. I show a check sheet of what is needed by the California Division of Fish and Wildlife for Mineral Remoteness Opinions in my Power Point given at the national AAPG convention in Salt Lake City in 2018. When I went online to look at the requirement for the state of Arizona, they had some comments on what they need in that state for a Mineral Remoteness Opinion report.

I do a lot of reading. Thus, I can recommend the following books, in chronological order:

  • 1853. Dickens, Charles. Bleak House. Probably the greatest novel I have ever read. As usual, a novel about some things that were wrong with Britain during his life: in this case, the legal system.
  • 1862. Turgenev, Ivan Sergeyevich. Fathers and Sons. A book about fathers and sons.
  • 1866. Dostoyevsky, Fyodor Mikhailovich. Crime and Punishment. A book about crime and punishment.
  • 1880. Dostoyevsky, Fyodor Mikhailovich. The Brothers Karamazov.
  • 1952. Steinbeck, John. East of Eden. A great novel about life in the Gabilan Range (east of Salinas)
  • 1991. Yergin, Daniel. The Prize: The Epic Quest for Oil, Money and Power. OK, I figured Susan Nash would want an oil industry related book, and I really did enjoy this book and the other one by Yergin listed below. Are his works as great as the others listed here? No.
  • 2005. Goodwin, Doris Kearns. Team of Rivals: The Political Genius of Abraham Lincoln. A great presidential history book that discusses how Lincoln was able to assemble three men that ran against him in the 1960 election to join and strengthen his cabinet for the impending war (Atty. Gen. Edward Bates, Sec. of Tres. Salmon P. Chase and Sec. of State William Seward).
  • 2011. Yergin, Daniel. The Quest: Energy, Security and the Remaking of the Modern World.

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