T.G. Mercer

Source: Energy Digital

Date :11/04/2008 05:03:37

For almost 100 years, T.G. Mercer Consulting Services, Inc. a company with a great legacy, has hauled and stored pipe, playing an important role in the development of America’s Oil and Gas industry. Exec learns more about its fascinating history

Written by Ian Armitage and Produced by Rich Gentile

It may be hard to believe that T.G. Mercer, which began with a herd of 1,000 mules transporting pipe across the Southwest, has evolved into a market leader in pipe transportation, but it is true.

Indeed, with advanced state-of-the-art equipment and a history of superior service and knowledge in transportation, management, real estate services and pipeline logistics, T.G. Mercer today continues to provide comprehensive consulting services to a number of distinguished customers.

“Our great grandfather established the business in 1910 with a herd of mules that were used to transport pipe across Texas, Oklahoma and Arkansas,” says George Mercer, President. “Since then, we have evolved, embraced technology, and are one of just a few in the industry today that have things like state-of-the-art pipe handling vacuum lifts, to ensure precision pipe handling, racking and storage.”

T.G. Mercer has a great legacy and is undoubtedly a leader in pipe handling and storage. “We are renowned for our attention to detail, knowledge and experience, and specialized equipment. This ensures efficient, safe and proper handling of all quantities of main line pipe, which is vital,” says George, who went on to explain that T.G. Mercer is known for handling and storing massive amounts of pipeline for Oil, Gas, and Utility companies across the United States.

“We are currently operating projects for Centerpoint Energy, Cross Tex Pipeline and Boardwalk/ Gulf South Pipeline, having completed projects for the Alaska Pipeline, Florida Gas Transmission Pipeline, MidTexas Pipeline and Northern Border Pipeline, amongst others,” says George, as if to confirm T.G. Mercer’s position.

Building on tradition

George took over the reins of the family business in 1993 and has been working with his brother Mack, vice president, since then on expanding the company’s potential. This is often a difficult challenge, especially when you operate in a cyclical industry. However, the last few years have seen order books bulge because of what George calls “a greater global demand for energy”.

“This is true,” adds Mack. “For the last 20 years, in all honesty, there have been slow periods, but we are now satisfying a 20 year backlog.”

George and Mack have a point. With oil prices at all time highs and new natural gas discoveries, there is a lot of new pipe being laid – and haulers are in great demand. “Technology has also caught up,” says George. “We have seen the development of horizontal drilling and that is driving a lot of this incremental gas.

Obviously we have the Barnett Shale on our doorstep, which is fantastic for business.”

The Barnett Shale is just miles away from T.G. Mercer’s headquarters in Weatherford, Texas, and is a geological formation of great economic significance. Indeed, it is the largest gas-producing field in Texas, covering some 15 counties in the northern part of the state. It is believed to have around 2.5 trillion cubic feet of natural gas, and is widely estimated to contain as much as 30 trillion cubic feet of natural gas resources. Oil also has been found in lesser quantities, but sufficient enough (with recent high oil prices) to be commercially viable.

“I woke up one day and they were drilling everywhere – there is so much work,” says George, who has positioned the company to deal with the demands coming out of the Barnet Shale. “We wanted to be able to cope with the growth and so made the necessary changes to our organization,” says Mack.

Unprecedented change

The Barnett Shale boom, as well as national and international expansions in the oil and gas market, has seen T.G. Mercer change considerably. “The change has been huge,” says George. “The sheer amount of work means that we are hauling more than ever. Rail lines are at capacity and we are trucking the pipe more and more. This presents logistical challenges for us, given that there is also a limited amount of equipment that can haul large pipe. This means our operations have to be seamless, which is a challenge, especially as our customers are demanding. However, being busy sure beats the alternative where you don’t have any pipe to haul.”

Advancements in technology, such as vacuum pads for pipe handling, have gone a long way in solving the problems associated with the growing demand.

Staying true

T.G. Mercer is an undoubted success, as well as a company that has stayed true to its roots, despite successes and failures. It has amassed a great understanding and is a trusted partner. However, according to George, the company will need to continue to find the right personnel. “What has made us different is our ability to solve a clients’ problem,” says George. “Brain power always makes more money than muscle power and I believe that as we go forward these challenges are going to increase as the market grows.”

Mack says, “We are one of the best at working with the pipe mills and pipe coaters at planning a comprehensive logistics plan that minimizes costs by utilizing barge, rail, and truck transportation, making sure we get the right pipe to the right place in the quickest time.”

The market is becoming even more international, with a greater deal of pipe coming in from abroad. This in itself will present a logistical challenge. “Our clients are already trying to find new, overseas sources of pipe that meet the specifications,” says George. “This is because the pipe mills here are becoming full - some of them are full out for years. As a result, we are going to have foreign pipe come in and we are going to see more of that. That again, offers unique challenges. It’ll need a unique combination of transportation sources to get the pipe to the staging locations in the future. As we go forward I see those challenges increasing as intermodal dependency increases. After all, it is easier to manage one way of moving things around than it is to manage two or three.” It’s vital then that T.G. Mercer can track and manage the movement of pipe by ship, barge, rail and truck.

Despite these challenges, it is important to remember they only exist because there is currently a big boom – which is hardly a bad thing. In this cyclical industry it is important to take the opportunities when they arise, something both George and Mack have a knack in doing. “T.G. Mercer has and will continue to be the leaders in hauling pipe,” says George.

“In this business pretty much everybody knows who we are, our late father, Tommy is in the Pipeline Contractors Haul of Fame, and we are enjoying a lot of success. Why? Well we have been around many years and built lasting relationships. But there are many other reasons too, such as our ability to react to change.”