00:00:00 Jordan Yates
This episode of The Energy Pipeline is sponsored by Caterpillar Oil& Gas. Since the 1930s, Caterpillar's manufactured engines for drilling, production, well service, and gas compression. With more than 2, 100 dealer locations worldwide, Caterpillar offers customers a dedicated support team to assist with their premier power solutions.

00:00:26 Speaker 2
The Energy Pipeline is your lifeline to all things oil and gas, to drill down deep into the issues impacting our industry. From the frack site to the future of sustainability, hear more about industry issues, tools, and resources to streamline and modernize the future of oil and gas. Welcome to The Energy Pipeline.

00:00:49 Jordan Yates
Hello, everybody. Welcome back to another episode of The Energy Pipeline. It is me, your host, Jordan Yates. Today, I am joined with Keaton Mayers, the general manager of manufacturing and engineering at Warren CAT. Keaton, say hello.

00:01:06 Keaton Mayers
Hello, everybody.

00:01:07 Jordan Yates
Keaton, are you tired? That's a lot of things to be the general manager of.

00:01:11 Keaton Mayers
I can tell you it's all in a day's work.

00:01:13 Jordan Yates
Oh my goodness. Well, guys, we are recording from PBIO, the Permian Basin International Oil Show. I guess I forgot the S at the end, but nonetheless, I'm excited to be here. We are at the Warren CAT booth. How do you think it turned out?

00:01:28 Keaton Mayers
I think our team did an amazing job here putting together an awesome exhibit here and a great place for customers to come and visit.

00:01:35 Jordan Yates
Yeah, I know. It really is, guys. If you are watching this via video or you're here in person, you'll see that there are some ginormous engines and some really cool things to come and see at this booth. Keaton, I'm just going to get right into it. Our first topic is going to be around advanced machinery design. Are you ready?

00:01:51 Keaton Mayers
I'm ready.

00:01:52 Jordan Yates
Okay. Keaton, could you explain how advanced technology, particularly in machinery design and engineering is contributing to more sustainable heavy equipment? That was kind of like a long way of saying how are you guys making the heavy equipment better?

00:02:08 Keaton Mayers
So I think it's a multitude of different things. So you've got all the way down to the basic materials that we're building things with from ground engagement tools, and then all the way up to our engines and the components we're putting inside of it. In the last couple years, you've really seen a large advancement to our horsepower ratings and efficiencies, and a lot of that can be attributed to newer technologies and better ways to simulate things throughout to predictive failures and things of that nature.

00:02:39 Jordan Yates
Yeah, it's kind of cool because I was telling someone from your marketing team earlier, I sit behind me and there's this huge engine and it's literally everything that we studied in our mechanical engineering degrees of all these engines. And I look at it now and I'm like, " I could not tell you how that thing works."

00:02:55 Keaton Mayers
Yeah. From today's applied engineering to book engineering in school, you utilize a lot of the basics, but when you get to something this large, it's a different ballgame.

00:03:08 Jordan Yates
Absolutely. And guys, the joke helps because Keaton and I both studied mechanical engineering at Texas Tech, so we have roughly the same education, give or take.

00:03:17 Keaton Mayers
Wreck'em.

00:03:17 Jordan Yates
Oh, yes, wreck'em. So next I want to talk about some emission reduction technologies. What within, I mean, I guess the engine we're sitting behind kind of qualifies, but what technologies would you say are rather cutting edge in reducing emissions that you guys are working on?

00:03:35 Keaton Mayers
So you've got the simplest ideas of idle reduction, which is basically just like the auto off feature on your car. When you're sitting at a red light, it shuts down and then when you come back online for the demand so that simply you're not burning fuel, so there is no emissions.

00:03:52 Jordan Yates
Yeah.

00:03:53 Keaton Mayers
And then there's the engine optimization softwares. A lot of control... Talking from a control standpoint, the engine optimizations that are putting their engines at the most efficient place, so more efficiency, less fuel burn, less emissions, right?

00:04:08 Jordan Yates
Yeah.

00:04:09 Keaton Mayers
And then we go all the way into fully electric. So Caterpillar's got some full electric heavy equipment. And then we're also in the space of powering some of that heavy equipment, all electric, whether it's frack fleets, drilling rigs, different things of that nature that have traditionally been burned using diesel, talking about now natural gas or even this large engine here behind us, the DGB. So replacing the diesel that we used to burn now with natural gas, meeting all the Tier 4 emissions requirements. So there's multitude of different things that we're today implementing to make that better.

00:04:47 Jordan Yates
Yeah, that's really cool that you get to be a part of that because sometimes I feel like we went to school, we studied all these engine types, and then right out of school everything starts going electric. And I'm just like, " Okay, how do we balance these two?" It's so much to learn so quickly. Do you feel like Warren CAT has taught you a lot about, I guess all the different kinds of power types?

00:05:07 Keaton Mayers
Absolutely. So Caterpillar being a great company to partner with as a dealership, we get a lot of insight and a lot of tools to work within the different types of power distribution, the power management, whether it's natural gas, diesel, electric, and they really help us learn and understand that to give the best offering to our customers.

00:05:31 Jordan Yates
I think on one of our first few episodes, we had somebody on from CAT, totally different division, but they were talking about how a lot of these machines are getting smarter, able to collect data. That way you guys are able to be fully optimized. How is the data analytics and collection in these large power systems helping to make them better?

00:05:50 Keaton Mayers
So there's a multitude. You've got just maintenance cycling. Before, a lot of customers were doing call it, I'm going to run it for this many days and then I'm going to do my PM maintenance. Now we've got hour meter readings, all time data. We have live data to analyze how things are performing, and we can make adjustments as they're happening in the field. So for optimization, the best thing to do is just have the data at hand. And telematics makes that readily available and we can analyze that as it's happening.

00:06:25 Jordan Yates
Yeah, that's really cool. I feel like in the manufacturing world, sometimes preventative maintenance is kind of a dirty word if you're actually talking to the maintenance guys because they're like, " I don't want to do more work than I already have to do." But something I like about Caterpillar's equipment is it seems like you guys are making it easy for them, relatively speaking as much as you can.

00:06:46 Keaton Mayers
Yeah, as easy as you can. But preventative maintenance prevents failures. And then also with the telematics systems, sometimes we can catch things going wrong before they actually do. And then with the integration of artificial intelligence, we're seeing more and more that predictive failure analytics is actually going to help that even further.

00:07:05 Jordan Yates
That's nice. Especially if you can prevent downtime when you're using all these technologies, you could save people a lot of money and you could save yourself a lot of hair by not having to rip it out.

00:07:16 Keaton Mayers
A lot of headaches, a lot of downtime. And when you have assets such as Zs out, a lot of money invested, so failures are not only costly from just a repair standpoint, but also from not being able to use something.

00:07:32 Jordan Yates
Keaton, I don't believe that this is your first podcast. You're killing it. I feel like the listeners are just like, " Man, this guy knows what's up." All right, I'm going to try to challenge you then. Could you share some insights into the development and the adoption of the electric motors and the hybrid ones, or was that a little before your time?

00:07:49 Keaton Mayers
So electric Motors is a little before my time. If you really talk about the electrification of the oil field, the drilling rigs were the first to electrify, and that's been going for several years now. And now we're talking with electric frack fleets, electric cool tubing units. I think if we can replace a diesel engine or a hydraulic motor with an electric motor, there's a lot of people going that direction just from an efficiency standpoint. The electric game or the electric shift, if you really look at it from an engineering standpoint, much more efficient, you have less maintenance, the power transmission, you don't have to use a transmission to move power through, so your efficiencies are a lot higher and you have a lot better control. So with the variable frequency drives that most people are using today to do the control with, they're instantaneous with PLCs to get that response that they're looking for.

00:08:51 Jordan Yates
Yeah, the more I see this electrification happening, the more I wish I would've paid attention during our controls lab. Oh my goodness, I had to relearn all this back in my career because it is just so much that's integrated now that I never thought would've crossed over unless you were in a facility or something like that. So it's definitely fun that in this landscape now we're seeing more skillsets, more electrical type people entering our workforce. And I think that's pretty exciting. I feel like we skipped right past this in the beginning, but can you kind of explain how Warren CAT being a CAT dealer is what they contribute? I mean, you have the CAT engines, but what does the Warren side do, if you will?

00:09:32 Keaton Mayers
So at Warren CAT, from an engine side or how we work, we take our customers needs and we work with CAT to determine what's the best option for our customers. And then also there is feedback to CAT on what our customer demands are if we don't have a product that fits. So not only are we there to help sell the product, but we're also there to service the product after the sale. So that's a large part of our business as well, is just taking care of our customers from a service perspective after you've bought the asset. So helping, working with CAT there as well to make sure that we have the parts and the pieces that are needed to keep these customer assets up and running.

00:10:11 Jordan Yates
Absolutely. So next I want to ask you less electrification, more alternative fuels. So we've heard a lot about the innovations in alternative fuels for heavy equipment. I guess here, natural gas would be one of them. Can you tell us a little bit more about their feasibility and how they fit into the sustainability landscape?

00:10:29 Keaton Mayers
Yeah. Natural gas has been around the oil field forever.

00:10:35 Jordan Yates
Yeah.

00:10:36 Keaton Mayers
I know it's part of it. But previously, natural gas was not a option to power some of these things that we're using it for today, a lot of the responsiveness and the ability to react to different changing of power demands. Today with the newer technology and the newer product design, it's enabled Caterpillar to compete in a market that we previously couldn't compete in from, whether it was a power generation or some of the other technologies that they're researching today. Even alternative fuel, hydrogen, we've got engines now that run on 100% hydrogen....

00:11:17 Jordan Yates
I need to look into those.

00:11:17 Keaton Mayers
... inthe power generation space. And even HVOs.

00:11:20 Jordan Yates
Okay.

00:11:22 Keaton Mayers
So for replacement for diesel.

00:11:24 Jordan Yates
Wow.

00:11:25 Keaton Mayers
In the DGB space as well, implementing natural gas to replace diesel. From a CAT perspective, I think they've done really well in adapting to the landscape and meeting customer demands of, " Hey, I need to reduce emissions." And then through this, we go electrification. And a lot of times our power grid is not able to keep up with that or it's not even...

00:11:49 Jordan Yates
Don't get me started on the power grid inaudible me go all day.

00:11:53 Keaton Mayers
Or simply the grid is not at the location that they need the power. So the next best thing is a natural gas generator to provide that power for the electrification side. So there's a multitude of options. You can go turbines. You can go reciprocating engines. You can go diesel. Some places that's even happening and just being the most efficient with it.

00:12:16 Jordan Yates
Yeah, it's kind of funny, we had somebody talk on the electrification, the oil field on here a few episodes ago, and I don't know why, but whenever I think electricity in terms of sustainability and we're changing, we're electrifying, I think, " Oh, we're using batteries." Which I know natural gas equals electricity, but I was like, " How are we just using giant batteries out here?" And then he clarified, " No, we're using natural gas in these engines. This is the new sustainable thing versus diesel." So it always seems like we're comparing one type to another. But would you say natural gas is becoming a really heavily adopted fuel source right now?

00:12:50 Keaton Mayers
It is becoming a heavily adopted fuel source. And then it's funny, you talk about batteries. Caterpillar has entered the battery game. They've made several great leaps in technology there. We do have batteries now that work with our natural gas engines. Part of the issues with natural gas engines is the responsiveness, but adding the battery technology in place will help that responsiveness where it can quickly respond to some of the changes that are going on.

00:13:17 Jordan Yates
Yeah. So something, and correct me if I'm wrong on this, that I think is interesting about these natural gas powered engines or the, is it dual? Not dual? What's the D stand for in DGB?

00:13:29 Keaton Mayers
Dynamic.

00:13:30 Jordan Yates
Dynamic. There we go. The dynamic engines is the fact that a lot of times there are states that have restrictions on flaring the gas that you are getting right there on site and that you can take that gas and then put it back into that engine right there. Is that correct?

00:13:44 Keaton Mayers
Yep. So I don't know if you saw outside, we have a trailer out here made by GTUIT. What that is is a refrigeration skid. So to get the best substitution ratings and things of that nature, some of the fuel we burn or come encounter with has to be treated before it can actually be burned in these engines. And so we've partnered with some other people to help provide that and create another technology that we bring into the oil field to actually treat that fuel so we have a good product to run in these engines, which also helps maintain the life of them.

00:14:17 Jordan Yates
Yeah. That's cool to me because a while ago we had an episode around sustainability and ESG. And there's all of our scopes of emissions. And it's like, " Maybe we could be Scope 1 carbon net- zero because we aren't emitting on scene." But it's like, " Okay, when you factor in the trucking of the natural gas to the scene, that's a different level of emissions." And so it's cool when you could take stuff onsite and not add in the logistics layer to actually get closer to these carbon goals. But enough on that because I can keep going down that hole. Let's get into materials innovation. So are there any noteworthy developments in materials used in the heavy machinery that are contributing to both durability and sustainability?

00:15:00 Keaton Mayers
So from a durability standpoint, there definitely is. From the sustainability side, you'd get me lying here. I'm not...

00:15:09 Jordan Yates
We'll talk durability then. Let's talk durability.

00:15:11 Keaton Mayers
I mean, I was actually just out in the shop the other day and there was a piston setting on the shelf that a guy was working on and it had a coating on it. There's just some of these things that have not been around for a long time in engines. Before, you didn't put coatings in engines because they flaked off and they got in oil filters and they got in fuel trains and they wrecked havoc. But now we're able to produce coatings that are able to either resist heat, reduce friction, things of that nature that are really helping from a durability standpoint. And then I guess you could say sustainability because it's prolonging the life as well.

00:15:49 Jordan Yates
Yeah, I mean, to me that counts as sustainability, but I'm also not in charge of defining what sustainability is. But if I were, I would call it sustainable.

00:15:59 Keaton Mayers
Can you tell me who is?

00:16:01 Jordan Yates
I'd like to talk to them.

00:16:03 Keaton Mayers
Yeah. Can we get a clear definition?

00:16:05 Jordan Yates
Absolutely. I'm sure there's one out there, but I'm unwilling to read it. Okay. What about the lifecycle assessments? We kind of spoke on that with the durability is leading to longer lives, but, sorry, life of materials, not lives in general. But sustainability is not just about the equipment's operation, it's also about the entire lifecycle. So how does Warren CAT approach lifecycle assessments to minimize environmental impact?

00:16:31 Keaton Mayers
So from a Caterpillar standpoint, we do a lot in the remanufacturing of engines. So when a engine reaches 80, 000 hours worth of used running life, we'll bring it in, completely tear it down and rebuild the engine using a large part of the same components. And then sending... We work with Caterpillar, they have a remanufacturing program so we can purchase remanufactured heads, remanufactured pistons. And then so that adds to the sustainability because not only are we rebuilding a product, we're also reusing a product that had a previous life as well. So from a sustainability and remanufacturing capabilities, the Caterpillar engine's probably one of the best as far as rebuild capabilities.

00:17:21 Jordan Yates
That's pretty sweet. One of our co- hosts, Lizzie Hurt, she said that she's really interested in the aspect of the, what is it called, the remanufacturing of them. She said that you guys do a really good job there. And Caterpillar is apparently pretty well known for that, which is great because like I said, guys, if you could see the size of these engines, to just have to throw it away, I don't know how you would do that. So thank God we can remanufacture.

00:17:45 Keaton Mayers
Let me tell you, it's not easy okay.

00:17:48 Jordan Yates
Yeah, I don't think you can just recycle. So I'm glad that we are in the business of remanufacturing. Earlier, we talked a little bit about predictive maintenance and, well, preventative maintenance. I don't know if we got as much into predictive. But can you tell us a little bit more about how you guys are doing that through your advanced technology? Maybe nerd out a little, get a little bit deeper into it.

00:18:10 Keaton Mayers
So predictive maintenance. So we can just start out with oil sampling. So customers bring us in an oil sample, we pull it when the engine's running, we send it into our fluids lab and they break it down and they'll bring out what constituents are actually in the oil, your tins, your coppers, and other things. And also even down to coolant and other things that are present in the oil that are, call it contaminants or it show a sign of wear.

00:18:44 Jordan Yates
Yeah.

00:18:44 Keaton Mayers
So you've got your copper and your tin and your oil, you know that you may have a bearing failure, or if you have coolant in your oil, you may have a predictive failure, that you may have a head gasket leaking or a bad turbo. There's ways we can track that down. But having that predictive, those oil samples is really paramount in being able to know when something's about to fail way before it fails and can prevent destruction of an asset from sending a rod through the block or cratering turbos or things of that nature. Being able to really dig into those oil samples there is a big one for us.

00:19:25 Jordan Yates
How often, if you know the answer, would somebody bring you an oil sample to test it out? Is that a regular thing?

00:19:31 Keaton Mayers
So we recommend every 250 hours. Roughly, in a lot of our applications, that's every 10 days.

00:19:39 Jordan Yates
Wow.

00:19:40 Keaton Mayers
And then also when you change the oil. So sometimes I get it, we're in the oil field, not everything is ability to bring that in every 10 days, especially when you think some of these sites have 30 to 40 of these engines on it, getting 30 or 40 oil samples and bringing them in and on us then to get them all processed and back to you. And we do a great job at that. But at least every oil change if possible. That would be best. Would I love it for everybody to bring them in every 250 hours? Absolutely.

00:20:14 Jordan Yates
Yeah.

00:20:14 Keaton Mayers
But at the same time, from a feasibility, every oil change, if you can bring us that oil sample so we can run that analyzation to tell you, " Hey, you've got starting to show some tin wear in your oil." Maybe it's not this oil change, but we'll track it over the next five. And maybe we say, " Hey, this was a isolated event," or it may even been, " Hey, this thing needs to come in for a rebuild before a catastrophic failure."

00:20:39 Jordan Yates
So I'm thinking when you're saying this about how if I'm getting my car oil change, which I never do exactly on time, that you go in and they say, " Oh, you have all these other things wrong." How confident are your customers that when you're telling them, " Hey, these other things are wrong," that they're like, " Oh, they're not just trying to get us to spend more, but they really know their business"?

00:20:58 Keaton Mayers
Well, I mean, so part of that is CAT helps us with that with some help with the diagnostic side of things, but also our customer is our main focus. So...

00:21:10 Jordan Yates
Absolutely.

00:21:11 Keaton Mayers
...we want them to return. We're not trying to be a used car salesman or your place that tells you you need blinker fluid. But we're really there for our customers and if we can prevent them from failing a block or spinning a bearing where we're going to have to spend a couple weeks waiting on machine work to get that engine back in the rebuild facility when we can say, " Hey, we can pull it out now and maybe we can just do a cylinder pack and you'll have it back in two days" kind of thing.

00:21:42 Jordan Yates
So I guess I read my mind ahead of time because I was literally about to ask you about customer education and how Warren CAT and then maybe CAT as well helps educate the customers on these engines or trainings or anything that goes along with it. It sounds like you guys are a good resource for when things go wrong, you're a trusted resource. But beyond that, what are you guys doing to educate your customers?

00:22:04 Keaton Mayers
So that customer relationship is something we're walking hand in hand with them. To say that we know everything that they're going to face would be a complete lie. So we're here as a resource to help with them learning through those situations. And then also we do trainings. We'll bring our customers in. We'll show them what we're doing on repairs and rebuilds, and we'll also train their technicians and help them get through some of these things. Because not all the time are we available. Sometimes it's the middle of the night. And most of the time we answer the call, but sometimes they need somebody right now, and if we can train their people and have that person there already, that's a good thing as well. So customer education, especially on these DGB engines, everybody's chasing max substitution and really to honing in with our customers on how we can achieve those higher rates of substitution is one thing that we have really focused on with several of our customers is spending the time of you need to run your engine at this speed and target this engine load to really get that max substitution and things of that nature. So we're willing to work with our customers in every aspect. Most of the time it's just picking up the phone and giving us a call and we're there to help.

00:23:17 Jordan Yates
Yeah, it sounds like you guys do a good job with customer empowerment because if you didn't, I mean, these are complicated machines. You can't just be like, " Good luck. Bye."

00:23:26 Keaton Mayers
"See you. Tell that warranty."

00:23:27 Jordan Yates
Yeah, see you when your warranty's done. But okay, that's good to know. Now, this is a statement that feels more true than any statement I've ever made, or at least today. So sustainability efforts often align with regulatory requirements. Does that feel true to you?

00:23:45 Keaton Mayers
Yeah, I would say a lot of it is being pushed by regulatory requirements, but also I think a lot of people are just out there to do better for everybody else.

00:23:56 Jordan Yates
I agree. I agree. But also we are curious of how you guys at Warren CAT are staying ahead of these evolving regulatory requirements because yes, I feel like behind the scenes we're already doing stuff and then the regulations come up and we're like, " Okay, cool, we can already meet that." But how do you guys anticipate it?

00:24:19 Keaton Mayers
Us at Warren CAT, I would say we rely heavily on our partner Caterpillar to help us in that. You would need five PhDs, seven lawyers, and a bunch of other secretaries running around doing paperwork just to try and stay ahead. Caterpillar has that team of people. They have those connections within other regulatory bodies to understand and learn what those new requirements are going to be and making sure at the same time that we have the correct technology coming up to meet those. A lot of times Caterpillar gets the opportunity to review some of those because they are such a large player. You can't just take out Caterpillar or you can't take out any of these other people because your infrastructure and a lot of other things are affected by it. So I think there's a large collaboration between Caterpillar and working through some of these items to make sure that we're all able to meet the sustainability goals and the regulatory requirements.

00:25:19 Jordan Yates
Why is regulatory so hard to say? I have to really slow it down.

00:25:22 Keaton Mayers
I don't know. I don't know.

00:25:23 Jordan Yates
Regulatory.

00:25:24 Keaton Mayers
Regulatory.

00:25:26 Jordan Yates
Yeah, they just had to make it a difficult word so we wouldn't talk about it as much. But now we're getting towards the end. And I want to ask you about some future outlooks. What do you see as the most promising advancements in technology that will further enhance sustainability efforts or just coming out as a cool technology that you guys are working on? It doesn't have to be something real, but something that you imagine in the future?

00:25:48 Keaton Mayers
Well, I mean...

00:25:49 Jordan Yates
Or it could be real. Up to you.

00:25:52 Keaton Mayers
Well, I think we're going to see large advancements in the natural gas space.

00:25:58 Jordan Yates
Naturally.

00:26:00 Keaton Mayers
Naturally. Yeah.

00:26:01 Jordan Yates
Yeah.

00:26:01 Keaton Mayers
So whether it be from large natural gas engines powering frack fleets to the ability for the general public to have access to back- up power at a cost- effective rate, and then also grid support technologies are coming out. And then also the big one that's out there is just the battery technology that we're dealing with. I feel like the battery technology is ever evolving and something that's new and top of the line today in a year may be old news. So I think that from a technology advancement point, the electrification and battery technology that people are implementing today because of the money and research that's being spent there that in the past hadn't been, I think that's where we're going to see the biggest change for sure.

00:26:55 Jordan Yates
That definitely sounds like on point for things that really are going to happen. I don't know what other answer I could have expected other than probably something realistic. You got that engineer mind. So is there anything else that you want to leave with the listeners today?

00:27:13 Keaton Mayers
Man, you throw this on me at the end.

00:27:15 Jordan Yates
I know, it's how you make it interesting.

00:27:18 Keaton Mayers
Well, I think...

00:27:20 Jordan Yates
Wreck'em.

00:27:20 Keaton Mayers
No. I think the biggest thing is is that as Caterpillar, we're here to support our customers. Warren CAT is in the Permian Basin, we're in Oklahoma, we're here for the long term. We're not here just to make the sale. We'll be here to support you after the sale. And then from a technology perspective, if there's anything that our customers want or need or have a random idea, give me a call. I'm always open, always available for the random rat chase or wild ideas.

00:27:56 Jordan Yates
Amazing. Well, Keaton, thank you so much for coming on. I'm so excited that people got to listen to this live and that everybody will be listening to it via podcast soon. So thank you so much.

00:28:07 Keaton Mayers
Thank you, Jordan.

00:28:08 Speaker 2
Come back next week for another episode of The Energy Pipeline, a production of the Oil and Gas Global Network. To learn more, go to oggn. gov.