2/12/16 TXOGA Voice

A Message from Todd Staples…

The political season is in full swing and several common-sense legislators are under serious attack, sometimes for taking a stand for free enterprise and jobs. U.S. Congressman Kevin Brady (R-The Woodlands) is facing three opponents in the Republican Primary who have all pledged to support the challenger who makes it into a runoff with Brady. Kevin is in the extremely important position of chair of the U.S. House Ways and Means Committee and has worked a long time to get there. It would be devastating for Texas to lose Kevin Brady at such a critical time. Also, state Representatives Byron Cook (R-Corsicana) and Charlie Geren (R-Fort Worth), who have both voted many times to help the oil and gas industry be a key component benefiting the Texas economy, are under heavy assault. Representative Renee Oliveira (D-Brownsville) is facing a challenge in his primary as well.

Surprisingly, we have seen the anti-oil and gas activists take a strong role in trying to knock off state Representative John Frullo (R-Lubbock). Below are excerpts from a press release the Texas Campaign for the Environment recently issued.

Grassroots activists are on tour through West Texas next week educating voters about environmental issues leading up to the March 1 primary election…. Door-to-door canvassers with Texas Campaign for the Environment will be generating handwritten letters to candidates for state house district 84 on Saturday, February 20th. This district is important because of a contested primary election between Rep. John Frullo and Republican Jim Landtroop, a former house representative.
“Lubbock residents of all political backgrounds can agree on keeping our air and land clean,” Chelsea Crawford, Field Manager for the group, said. “It’s time that state politicians respond to the values of their constituents, and that’s why we look forward to educating voters about the upcoming election and giving them the opportunity to make their voices heard.”

Anti-fossil fuels organizations are going strong and are taking advantage of the elections to further spread their false and misleading information that is damaging to your ability to do business. I encourage you to motivate your employees, co-workers, friends and family to get involved in backing pro-energy candidates for office. Please call or email me or Lisa Lucero, TXOGA PAC Coordinator, if you want more information.


 

TXOGA REPORTS

LEGISLATIVE 

On Tuesday, the House Natural Resources Subcommittee on Private Property Rights on Water met in Burleson. The two main topics of discussion were the Waters of the United States (“WOTUS”) Rule and private property rights under groundwater regulation. Presenters were unanimous in believing that the WOTUS rule will have a negative impact on Texas. On the topic of groundwater, the groundwater conservation districts continue to support status quo while the Texas Conservative Coalition, Texas Association of Groundwater Owners & Producers, and the Texas Desalination Association call for changes to current law to allow for the development of groundwater markets.

The Senate Select Committee on Property Tax Reform & Relief took public testimony for the second time, in Harlingen on February 11. As with San Antonio’s hearing, the Harlingen hearing was well-conducted and many of the same arguments were laid out. Chairman Bettencourt announced at the outset that Lt. Governor Patrick finds the current rollback mechanism extremely cumbersome and virtually impracticable in urban areas. Unlike at the San Antonio hearing, local officials at the Harlingen hearing did not deny that their growing property tax levies were tax increases, a fact that the Chairman seemed to appreciate. He also congratulated Cameron County for delivering (or rather, allowing the state to deliver) an actual tax cut to homeowners last year. Judge Neal of Nueces County, a former long-serving mayor of Corpus Christi, assailed the equal-and-uniform appeal authority. He had particular criticism for the provision of law that allows a successful taxpayer in an appeal to recover attorney’s fees from the appraisal district.

Judge Neal cited unfunded mandates from the state and federal government, a costly union deal, new IT costs, indigent defense and health care costs as reasons that the rollback system should remain as it is. He also mentioned that because of local exemptions, many over-65 homeowners pay no county property tax in Nueces. Senator Lucio appeared to offer some support for Judge Neal’s message, saying “the last thing anyone of us want is to disrupt what is working well.”

On a final panel, Comptroller staff described the training that ARB members receive annually, and Chairman Bettencourt appeared to be openly skeptical that the entire book could be learned in 3 hours.

The next hearing may take place in Lubbock.

REGULATORY 

Joint Environmental Committees Meeting on Ozone and Other Important Matters

The Refinery Environmental Law Committee (RELC), Refinery Environmental Committee (REC), E&P Environmental Law Committee (EPELC), and Production Environmental Committee (PEC) met on February 9 to discuss regulatory and compliance challenges in the 2015 ozone standard and to discuss an association strategy on regulatory and legislative advocacy on its implementation. The conclusion from this discussion was to form a workgroup to determine TXOGA action. (Please look for a follow-up email from Mari requesting workgroup membership.) In addition, RELC Chair, Gindi Vincent, and REC Chair, Steve Hansen, led a discussion of current issues facing their committees, including 1) a TCEQ rule project that was recently opened to address EPA’s SIP call on Texas’ MSS affirmative defense provision via an alternative work practice; 2) the joint committee effort underway with TCEQ and EPA to construct a workable emission reduction credit program for area source emissions; and 3) advocacy on TCEQ’s implementation of the Refinery RTR rule. Likewise, EPELC Chair, Dan Isenhower, and PEC Chair, Suzi Holland, discussed important issues currently in front of their committees such as 1) EPA Region 6 and TCEQ flyovers to detect certain air emissions; 2) possible increasing use of RCRA citizen suits to challenge permit-exempt stormwater discharges from E&P locations; and 3) TXOGA’s role in comments to the BLM’s recently proposed rules on venting and flaring.

Conference Call to Discuss Advocacy on Final Rule for Methane and Source Determination

The Subcommittee on Methane and Source Determination Rule Comments met by conference call on February 10 to discuss whether the association should engage EPA on the very detailed comments it submitted to the agency in the fall of 2015 regarding the following EPA proposed rules addressing the Oil and Natural Gas Sector: 1) emission standards for new and modified sources (methane); and 2) source determination for certain emission units. The agency is predicted to issue a final rule in the coming months so the time to follow up on our comments, if desired, is fast approaching. The subcommittee decided to request a proposal from long-time outside comment counsel, Shannon Broome of Katten Muchin Rosenman, to include top issues for a potential advocacy effort, that would be aimed to supplement rather than duplicate other trade groups’ approaches.  Those issues would potentially include 1) alternative compliance options, 2) our preferred approach to the source determination rule proposal, and 3) the impact to small producers of the proposed rule’s requirement to use specific types of equipment for compliance.  After receiving the proposal, the subcommittee will decide the importance of continued advocacy and whether to fund the effort.

FEDERAL – Well Control Rule Update TXOGA accompanied member companies from the Gulf Economic Survival Team (“GEST”) at several meetings as they presented the latest information on the proposed Well Control Rule as well as provided the key findings from a macroeconomic study that was recently completed. GEST retained international research consultants Wood Mackenzie to analyze and assess the impacts that the proposed rule would have on America’s oil and gas industry, our national economy, and Gulf Coast communities. More specifically, GEST sought to understand the adverse impacts of the rule on exploration and production costs, future investment in the Gulf, lease activity, jobs, as well as tax and royalty revenues. These findings include direct impacts to Texas. GEST conducted follow ups with the Texas Railroad Commission, Office of the Governor, General Land Office, Chair Geanie Morrison, Speaker staff, and Lt. Governor staff. We will be briefing the Comptroller’s office at a later date.

Additionally, TXOGA has been granted a meeting with OMB to discuss this rule on March 4, 2015 in Washington, D.C.

JUDICIAL

Interested parties of the E&P Environmental Law Committee, Refinery Environmental Law Committee, Pipeline Committee, and E&P Law Committee held a conference call on February 8 to discuss whether TXOGA should participate in the Texas Supreme Court case, ExxonMobil v. Lazy R Ranch, involving surface contamination, by filing an amicus curiae brief. The two issues presented to the Court are 1) the proper relief for permanent injury to real property and 2) the date of accrual of the claim and discovery rule under statute of limitations jurisprudence.  There is considerable interest to brief on the damages question, but the Court could well decide the case on the limitations issue, which may have implications in other contexts, such as in lease disputes.  Therefore, the group decided to more fully vet this issue and then determine whether it is advisable for TXOGA to file a full brief on both issues.

COMMUNICATIONS & MEDIA

TXOGA sponsored the Texas Tribune/KLRU Texas Railroad Commissioner GOP Candidate Forum that took place on Monday, February 8. All seven Republican candidates for Commissioner David Porter’s seat participated. The event, moderated by Evan Smith, was hosted at UT Austin and streamed live on the TXOGA and Texas Tribune websites. The event will air on KLRU on February 15 at 7pm and is available for online viewing at: http://www.texastribune.org/2016/02/09/video-a-conversation-with-gop-rrc-candidates/.

Also, please note the Midland Reporter-Telegram has published a Q&A with 6 of the 7 Republican candidates, Wayne Christian, Gary Gates, John Greytok, Ron Hale, Doug Jeffrey and Weston Martinez.  Lon Burnam (D) and Mark Miller (L) also responded to the Q&A.  Here is a link to the article: http://www.mrt.com/business/oil/top_stories/article_b2c0e88a-d115-11e5-a316-1f2e2143d02c.html

This week TXOGA issued statements on President Obama’s $10/barrel fee and the U.S. Supreme Court’s stay of the EPA’s Clean Power Plan. You can view TXOGA’s responses, along with other items we talked about this week, on TXOGA’s Facebook page: www.facebook.com/TexasOilandGasAssociation.

Cory Pomeroy made a presentation on February 11 at the 19th Annual Hot Air Topics Conference hosted by the Air & Waste Management Association, Gulf Coast Chapter, in Houston. He presented on TXOGA’s recently submitted comments to EPA (referenced above) on EPA’s proposed rules regarding methane and source determination. Todd Staples spoke at the Nacogdoches Rotary Club on February 12 and provided an industry update.

TEXAS OIL AND GAS ASSOCIATION GOOD GOVERNMENT COMMITTEE (TXOGA PAC)

Todd Staples delivered contributions from the TXOGA PAC to State Representatives John Raney, Byron Cook, Charlie Geren, John Cyrier and candidate Bennett Ratliff, in their districts. Staples and Shannon Rusing attended an Austin fundraising reception for state Senator Carlos Uresti on February 2.

TXOGA PAC hosted a fundraising luncheon for state Representative Rene Oliveira (D – Brownsville) on Thursday, February 11. Several member companies participated in the luncheon. Chairman Oliveira has a primary race but is expected to win handily.

MEMBERSHIP 

TXOGA was an exhibitor at the NAPE Summit – the industry’s largest prospect expo and gathering of E&P decision makers – in Houston this week. TXOGA staff visited with hundreds of individuals and companies that are current or prospective members of the Association. NAPE is the world’s largest E&P (upstream) expo and it was widely attended.

Membership dues invoices were sent out in December. If not already processed, please pay your dues immediately and contact Neal Carlton at ncarlton@txoga.org with any questions.

TEXAS OIL & GAS ASSOCIATION WORKERS’ COMPENSATION SAFETY GROUP

If your company is not already maximizing savings by being a part of the industry’s largest workers’ compensation insurance program in Texas, please contact Jim Sierra at jsierra@txoga.org today to obtain easy information on the best way to access this program.

UPCOMING EVENTS

  • Newly elected state Representative John Lujan (R-San Antonio) will be sworn in on Monday, February 15 at 10:30am in the House Chamber.  Lujan has a primary race in March and will face a democratic opponent in the November general election.
  • On Tuesday, February 16, state Representative Gene Wu (D-Houston) will have a fundraiser at the Austin Club at 4:30PM-6:30PM. TXOGA PAC is supporting Representative Wu in his primary race and we plan to attend.
  • TXOGA will host the first in a series of “Lunch and Learns” on Thursday, February 18 at TXOGA. We have received over 50 confirmations from legislative staff who plan to attend. Greg Mathews with Chevron North America is our first guest speaker and will provide a broad overview of oil and gas leases for the group. Space is limited, please RSVP to Lisa Lucero at llucero@txoga.org, if you plan to attend.
  • The next meeting of TXOGA’s Communication Committee will be a conference call on Tuesday, February 23 from 3:00PM – 4:00PM. Calendar invites were sent out this week. If you did not receive an invitation and feel that you should have please contact Kate at kate@txoga.org.
  • TXOGA will host an election night watch party on Tuesday, March 1 from 7:00PM – 10:00PM in TXOGA’s Conference Room. RSVP is requested, llucero@txoga.org.
  • The Energy Council’s 2016 Federal Energy and Environmental Matters Conference will take place in Washington, D.C. on March 3 – 6, 2016. TXOGA will be coordinating a dinner on March 3. This will be a smaller event than previous Energy Council’s so please contact Lisa Lucero at llucero@txoga.org if you plan to attend so we can plan accordingly.
  • TXOGA PAC will host a fundraising luncheon for Representative Todd Hunter (R-Corpus Christi), Chair of the House Calendars Committee, on March 9. Please contact Lisa Lucero at lisa@txogapac.org.  Attendees must be donors to TXOGA PAC and/or bring a donation directly to Rep. Hunter.
  • TXOGA Board of Directors will meet in Austin on March 29 and 30. If your company has a board seat, please encourage your board member to attend and RSVP at their earliest convenience. If you do not have a board seat, the March 29th dinner would be good to attend as TXOGA will honor both outgoing state Senator Troy Fraser and House Energy Resources Chair, state Representative Drew Darby, for their service to Texas.

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