3/24/16 TXOGA Voice

A Message from Todd Staples…

In recognition of Good Friday, we are sending out TXOGA Voice a day early. We hope you and your family have a Hoppy Easter weekend!


TXOGA REPORTS

LEGISLATIVE

Two important events for the Legislative Committee to consider this week:

  • Tuesday, March 29 and Wednesday, March 30, 2016—The TXOGA Board of Directors will meet in Austin. 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 29 dinner would be good to attend as TXOGA will honor both outgoing state Senator Troy Fraser and House Energy Resources Committee Chair, state Representative Drew Darby, for their service to Texas.
  • Wednesday, March 30, 2016 – TXOGA invites you to join us for a Republican Lieutenant Governor’s Association Luncheon (RLGA) on Wednesday, March 30 from 12:30pm-1:30pm in TXOGA’s Conference Room. As you may know, Lieutenant Governor Dan Patrick was recently named to the RLGA 2016 Executive Committee. We are hoping to help raise awareness and funding for the June RLGA 2016 Conference in Austin this June. Matt Walter, President, and Scott Binkley, Executive Director, will attend and represent the RLGA. Please RSVP to Kristen Fuchs at kfuchs@txoga.org.

Technical Advisory Committee to the Bureau of Economic Geology

Today, Friday, March 24, Governor Abbott appointed the Technical Advisory Committee to the Bureau of Economic Geology. The Committee will advise the Bureau of Economic Geology on the use of the funding, including the TexNet Seismic Monitoring Program and collaborative research relationships with other universities in Texas, and on the preparation of a status report to the Governor and Legislature.

House Bill 2, passed by the Legislature during the 84th Legislative Session, created the Advisory Committee and appropriated $4.47 million to UT for the purchase and deployment of seismic equipment, maintenance of seismic networks, and modeling of reservoir behavior for systems of wells in the vicinity of faults.

The following were appointed to the committee:

Dan Hill of College Station is a professor and the Stephen A. Holditch Department Head Chair of the Harold Vance Department of Petroleum Engineering at Texas A&M University. He is a Distinguished Member of the Society of Petroleum Engineers (SPE) and a member of its board of directors, and is a technical editor for the SPE Productions and Operations Journal. Additionally, he is a member of several SPE committees, including the Global Training Committee, International Faculty Achievement Award Committee, Hydraulic Fracturing Technology Program Committee and the Asia Pacific Hydraulic Fracturing Program Committee. Hill received a Bachelor of Science from Texas A&M University and a Master of Science and Doctor of Philosophy from the University of Texas at Austin.

Chris Hillman of Irving is city manager for the City of Irving. He is a member of the International City/County Management Association and the Texas City Management Association. Hillman received a Bachelor of Arts and Master of Public Administration from Brigham Young University.

Dana Jurick of Houston is manager of Seismic Analysis for the Geoscience and Reservoir Engineering Organization at ConcoPhillips Company. He is a member of the Society of Exploration Geophysicists, and he was honorably discharged from the United States Army Reserve. Jurick received a Bachelor of Science from Syracuse University and a Master of Science from The University of Texas at El Paso.

Hal Macartney of Irving is geoscience manager of Sustainable Development for Pioneer Natural Resources. He is a member of the American Association of Petroleum Geologists, American Geophysical Union, Seismological Society of America, Rocky Mountain Association of Geologists and the Society of Petroleum Engineers. Macartney received a Bachelor of Arts from Dartmoth College.

Kris Nygaard of Houston is senior stimulation consultant for ExxonMobil Upstream Research Company. He is a member of the Society of Petroleum Engineers, Society of Mechanical Engineers, Seismological Society of America and the Tau Beta Pi National Engineering Honor Society. Nygaard received a Bachelor of Science, Master of Science and Doctor of Philosophy from the University of Arizona.

Craig Pearson of Midland is the State Seismologist for the Railroad Commission of Texas. He is a member of the American Geophysical Union, Seismological Society of America, American Association of Petroleum Geologists and the International Society Explosives Engineers. Pearson received a Bachelor of Science from The University of Texas Permian Basin and a Master of Science and Doctor of Philosophy from Southern Methodist University.

Brian Stump of McKinney is a professor and the Albritton Chair of Geological Sciences at Southern Methodist University. He is a member of the Seismological Society of America, Society of Exploration Geophysicists, International Society Explosives Engineers and the American Geophysical Union. Additionally, he is a fellow of the Royal Astronomical Society and the American Association for Advancement of Science. Stump received a Bachelor of Arts from Linfield College and a Master of Arts and Doctor of Philosophy from the University of California, Berkeley.

Scott Tinker of Austin is the State Geologist of Texas, director of the Bureau of Economic Geology, acting Associate Dean of Research and Edwin Allday Endowed Chair of Subsurface Geology and professor at The University of Texas at Austin Jackson School of Geosciences. Additionally, he is director of the Advanced Energy Consortium. He is a past president of the American Association of Petroleum Geologists, Association of American State Geologists, Austin Geological Society, Gulf Coast Association of Geological Societies, and current president of the American Geosciences Institute, representing over 250,000 geoscientists worldwide. He is a certified Professional Geoscientist in Texas, holds appointments on the National Petroleum Council and Interstate Oil and Gas Compact Commission, and is a member of numerous other professional societies and boards. He is a fellow of the Geological Society of America, trustee associate of the American Association of Petroleum Geologists Foundation and trustee of the American Geological Institute Foundation and the Association of American State Geologists Foundation. Tinker received a Bachelor of Science from Trinity University, Master of Science from the University of Michigan and Doctor of Philosophy from the University of Colorado.

Robie Vaughn of Dallas is the owner of Vaughn Capital Partners, LLC. He is a co-founder and member of the Dallas Producers Club and member of the Dallas Petroleum Club and of the Society of International Business Fellows. He is a member of The University of Texas System Chancellor’s Council Executive Committee, Harry Ransom Center Advisory Board and the McDonald Observatory and Department of Astronomy Board of Visitors and a life member of The University of Texas at Austin Development Board, President’s Associates, Texas Exes and Texas Cowboys Alumni Association. Additionally, he is a member of the Athletics Longhorn Foundation Advisory Council, and the Culver Educational Foundation Board of Trustees. In addition, he served on The Commission of 125 as co-chair of the Resources and Infrastructure Committee for The University of Texas at Austin in 2003-2004. Vaughn received a Bachelor of Business Administration from The University of Texas at Austin.

Senate Select Committee on Property Tax Reform Hearing

On March 21, the Senate Select Committee on Property Tax Reform met today in Lubbock. Present were Senators Van Taylor, Creighton, Uresti, Bettencourt, Hancock, and Perry.

Senator Perry welcomed the committee and witnesses to Lubbock, saying that the committee’s work is part of a roughly 10-year cycle that Texas goes through on reviewing the tax system. He said that he is aware that local control is in the hands of locally elected officials, but he also hears that people are deciding whether to buy houses because of the tax system and that there is a perception that smoke and mirrors are being used under the property tax.

As with prior hearings, the most impassioned exchanges quickly distilled out to the appropriateness of strengthening voter power over the imposition of property tax increases through Truth-in-Taxation, or TNT. The de facto proposal appears to be that embodied in SB 182 of the 2015 legislative session, under which the current 8% increase allowed would be reduced to 4% and voter approval would be required to exceed such an increase. Witnesses for the Texas Association of Realtors and Texas Apartment Association endorsed the concept, while city and county officials bluntly rejected it. What was slightly different about this hearing was the frequency with which local officials said that stronger TNT should not apply to their city or county, referring to it derisively as “a blanket solution”, “Big Brother government,” and stating that “one size does not fit all.”

Jeff Lowry, representing the Texas Apartment Association, testified that ARB members, or rather the ARB process, needs to be made accountable for its actions. He also said that the association opposes valuation caps and mandatory sales price disclosure.

Robert Rogers, representing himself, testified that business inventories should be exempted from property tax.

Mayor Harpole of Amarillo had perhaps the longest, most impassioned, even bitter, testimony, refuting  the validity of the  Comptroller statistics.  Senator Hancock pointed out that the City itself is the source of the data, and Chairman Bettencourt followed by saying “you’re arguing against your own numbers.” Harpole made the case that “we are not your enemy,” and said that because they have been conservative with their finances in the past, they should not be as restrained from future increases more than cities that have been more profligate. In an exchange between Harpole and Taylor, the senator said “You’ve interrupted me six times.” Bettencourt defended Taylor’s questions, saying that his asking “when is enough, enough?” is not condescending.

Other taxing units saying that stronger TNT is not for them specifically, for various reasons, included Garza, Odham, and Midland counties and the City of Spearman. Senator Perry agreed with one witness that we are a diverse state and that one size does not fit all.

Senator Taylor also asked a number of local governmental representatives how they would view a spending cap comparable to that which applies to the state government. Judge Allred of Oldham county said he would oppose that unless it somehow allowed for cost drivers like indigent expenses.

Daron Fredrickson, representing the Texas Oil and Gas Association, pointed out that Texas’ system is among the best in the country, but that increased separation of the ARB from the Central Appraisal Districts would improve ARB independence, and that existing law – Section 23.175 of the tax code – should not be weakened.

David Landis, of City of Perryton, referred to a strengthened TNT as “Big Brother government”, citing that the state gives them no money, and respectfully observing that “you are not elected to run city governments.” Senator Taylor then lectured Mr. Landis that the state created cities and counties, and that it is the responsibility of state lawmakers to take on these issues. “This is our job. We’re doing our job.” “Government budgets are growing faster than family budgets.”

Senator Bettencourt also offered that the current 8% is really more like 13% when all the arithmetic is done. “Senator Taylor is right. We’re going to look at this problem. Government has the guarantee (of ever-increasing income). The family does not.”

Senator Perry closed by pointing out that all areas of the state are different.

REGULATORY


Texas Commission on Environmental Quality – Environmental Flows Stakeholder Meeting

On March 22, a TXOGA representative attended the Texas Commission on Environmental Quality (TCEQ) stakeholder meeting regarding revised draft Senate Bill 3 Permitting Guidelines. TCEQ staff briefly reviewed the proposed revisions and heard public comments from one group. Written comments on this draft are due May 1, 2016.

The draft is available by clicking here.

Comment submission information can be found by clicking here.

TXOGA Regulated Practices Committee

The TXOGA Regulated Practices (RPC) Committee held its regular monthly meeting on March 23. The committee discussed the Railroad Commission’s (RRC) implementation of the Unconventional Fractured Treatment (UFT) rule and the committee discussed harmonization of the State rule with special field rules. The committee also provided an update on the disposal well workgroup activities including efforts to identify probable areas of concern and noted that a meeting with RRC’s Underground Injection Control staff is being considered. The committee discussed the ongoing issues with the RRC Cementing Report -Form W-15 and the calculation of “top of cement” and discussed the possibility of a joint industry association meeting on the issue. TXOGA staff updated the committee on a recent meeting with Sunset Commission staff regarding the review of the RRC noting Sunset staff concerns regarding bonding; a bonding workgroup was established with Yolanda Perez (Oxy) as chair. The next meeting of the RPC will be held on April 20.

COMMUNICATIONS & MEDIA

As part of the upcoming TXOGA Communications Committee meeting, TXOGA is hosting a workshop to discuss the employee mobilization tactics of our members companies. In anticipation of the 2017 legislative session, TXOGA is working to ensure we are able to activate those who support our industry and provide the necessary resources to our member companies to activate their employees when necessary. As part of the workshop, the committee will discuss what type of information TXOGA should include in an “Employee Mobilization Manual” that would be available for any member to share with employees. In preparation for this workshop, TXOGA has asked the communications committee members to submit any educational materials that describe how employees can share their support for the industry to Kate (kate@txoga.org). If you have any information you would like the communications committee to review as part of this workshop, please send it to Kate. Remember, if you haven’t already, please Like TXOGA on Facebook and Follow TXOGA on Twitter and encourage your colleagues to do the same!

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

It has never been more critical to elect people who already understand the oil and natural gas industry and those who are willing to learn more about the industry and its tremendous contribution to the Texas economy. Your active participation is crucial as our PAC gears up for 2016 fundraising. Please contact Lisa Lucero at lisa@txogapac.org or click on the DONATE TODAY button below, to learn how you can become a member today!

MEMBERSHIP

In an effort to have a truly unified industry voice in Texas, TXOGA is working to recruit new members. If you know of industry counterparts that are not involved in the work of the Association or are former TXOGA members, please contact Neal Carlton at ncarlton@txoga.org. If your company would like to make changes to your representatives who serve on TXOGA committees, please email Neal. We can also send you a current breakdown of those from your company serving on committees, if desired.

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

 

 TEXAS OIL & GAS ASSOCIATION WORKER’S 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

 

  • Tuesday, March 29 and Wednesday, March 30, 2016—The TXOGA Board of Directors will meet in Austin. (Details above.)
  • Tuesday, March 29, 2016—The Senate Committee on State Affairs will meet at 9am in the Senate Chamber to take up and consider the following interim charge: Gather and review data on the compensation provided to private property owners for property purchased or taken by entities with eminent domain authority. Examine the variance, if any, between the offers and the fair market values of properties taken through eminent domain. Make recommendations to ensure property owners are fairly compensated.
  • Tuesday, March 29, 2016—The Senate Committee on Transportation will meet at 9am in E1.016 to take up and consider the following interim charges:
    • Review State Highway Fund grants and loans to Regional Mobility Authorities (RMA) and make recommendations if additional oversight procedures are needed to ensure the RMA’s expenditures are a valid and accountable use of State Highway Funds.
    • Review current state and federal regulations, penalties and fines related to oversize and overweight vehicles and make recommendations to minimize impacts on the state’s roadways and bridges.
  • Wednesday, March 30, 2016–The Senate Finance Committee will meet at 9:30am in E1.036 to hear invited and public testimony on the following interim charges:
    • Study the benefits, including the dynamic effects, of continuing to phase out the franchise tax. Consider alternate approaches to funding the Property Tax Relief Fund.
    • Review the state’s current sales tax holiday structure and determine its economic benefit to the state. Evaluate and consider the merits of any potential expansion of the tax holiday either in the application of the sales tax exemption or the timing of the holiday.
  • Wednesday, March 30, 2016–The Senate Committee on Business and Commerce will meet at 1pm in E1.016 to discuss the following business: Receive updates from the Public Utility Commission of Texas and the Electric Reliability Council of Texas.
  • NEW – Thursday, March 31 – H2O4TEXAS Statewide Tour Invites you to the Region G Town Hall Meeting (open to public, everyone is welcome). Located at Brazos River Authority Headquarters, 4600 Cobbs Drive, Waco, Texas, 76710.
  • Friday, April 1, 2016–The Senate Committee on Natural Resources will meet at 9am in E1.012 to hear the following charges:
    • Interim Charge 3 – Economic Development: Evaluate the effectiveness and necessity of programs and resources currently used to support economic development in Texas. Make recommendations regarding continuation of effective strategies, modification of existing administrative or regulatory barriers, and the reduction or elimination of ineffective programs.
    • Interim Charge 4 – Expedited Permitting: Evaluate the permitting process in Texas and neighboring states and make recommendations for eliminating unnecessary barriers and expediting the process to ensure that the regulatory process is consistent and predictable.
    • Interim Charge 7 – Monitoring Charge: Monitor the implementation of legislation addressed by the Senate Committee on Natural Resources and Economic Development during the 84th Legislature, Regular Session, and make recommendations for any legislation needed to improve, enhance, and/or complete implementation. Specifically, monitor the following: 1) Legislation relating to Texas aerospace incentives; 2) Expedited permitting; and 3) Electric utility rate adjustments.
    • (The Committee will examine Parts 1 and 2 of Interim Charge 7 at the posted time and date, but will examine Part 3 separately at a later hearing.
  • NEW – Wednesday, April 6, 2016 – TXOGA Communications Committee Meeting and Employee Mobilization Workshop will be held at TXOGA from 10:30am – 1:30pm.

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