American Oil and Gas Reporter - January 2012 - 243

The Presidential Papers
Association of Energy
Service Companies

ANGIE SIMS-LONG
General Manager
Buster's Well Service
Kermit, Tx.

from the president
The Association of Energy Service
Companies was founded in the Permian
Basin of Texas in 1956. It was known then
as the Association of Oilwell Servicing
Companies. A group of rig contractors saw
a need to have a unified voice to deal with
workplace safety, develop common work
practices, and have some weight when
dealing with government regulation.
The past year was eventful, not only for
AESC, but for the entire oil and gas industry. The association dealt with numerous issues throughout the year, and anticipates many of those issues will continue
in 2012.
We dealt continually with the Occupational Safety and Health Administration's mandate for flame resistant clothing
through 2011 after OSHA's letter of interpretation was presented to industry in
March 2010. AESC did finally receive a
response to its concerns from OSHA, 11
months after it submitted its letter.
In conjunction with other industry associations, including the American Petroleum Institute, Independent Petroleum
Association of America, International
Association of Drilling Contractors, and
the National STEPS (Service, Transmission, Exploration and Production Safety)
Network, we continued to work with
OSHA to understand its reasoning for the
FRC mandate, but more importantly, to understand the process through which OSHA
made its final determination.
Our message has been that OSHA
should have engaged industry, and worked
with association groups and companies, to
come up with a joint determination on the
use of FRC. Instead, it was done without
due process, lack of public or industry in-

put, and was mandated in a manner that undermined the relationship between OSHA
and industry.
Most recently, California OSHA had a
petitioner request that the upstream oil and
gas community mandate the use of automatic engine shutdowns in the industry. In
researching the reasoning for this request, we
felt the lack of incidents
involving fire and explosions from runaway
engines in California did
not justify the mandate.
The petitioner in this case used incidents outside of California to bolster its
case for using the devices, even quoting the
offshore Deepwater Horizon incident as a
reason to mandate their use. Depending on
engine size, this would have cost industry
between $400 and $3,000 an engine,
which CalOSHA felt was not financially
significant enough to study and perform a
total cost analysis.
In the end, a group of representatives
from the oil and gas industry testified
against making automatic shutdowns
mandatory and quoted numerous reasons
(some mentioned here) as to why. We have
been successful to date in delaying the final ruling, but we anticipate there will be
more to come on this issue.
Advocacy Issues
The AESC continued to be politically active throughout 2011 and will carry that into
the 2012 elections. We have held our annual
Washington fly-in every spring, and last year
had nine representatives meet in Washington with numerous legislators and staff from
throughout the United States.
Our message was threefold:
* We were concerned with the president's fiscal year 2012 budget, which
proposed to eliminate oil and gas tax deductions. These provisions were created
many years ago in recognition of the financial risk associated with oil and gas exploration and development. The proposed
tax increases would cost industry more
than $36.5 billion over the next 10 years,
and would have a detrimental effect on

★
American jobs and domestic production.
* OSHA's mandate to use FRC was
discussed with all, emphasizing AESC's
belief that there was lack of due process
in a public comment period, and an unnecessary mandate to industry.
* HR 1084 and S 587, the FRAC
(Fracturing Responsibility and Awareness
of Chemicals) Act would repeal the exemption for hydraulic fracturing in the
Safe Drinking Water Act. Hydraulic fracturing is an important tool that has increased the amount of oil and natural gas
produced domestically, and has been utilized safely for the past 50 years. We believe the states are in a better position to
effectively regulate hydraulic fracturing,
and have been ably performing this function since hydraulic fracturing was introduced.
AESC maintained its political action
committee in 2011 and is actively soliciting contributions to expand that fund during this election year. In 2010, we were
able to commit PAC resources to numerous legislators throughout the United
States (states included Texas, Oklahoma,
Kansas, Arkansas, North Dakota, New
Mexico, Pennsylvania and Mississippi).
This is an extremely important election
year in which control of the U.S. Senate
and the executive branch will be at stake
for both parties. We will be featuring numerous articles in our magazine, Well
Servicing Magazine, throughout the year,
highlighting some of those key races.
Operational Issues
One issue that could have an impact on
our entire industry is the long awaited
hours-of-service rule changes. The most
important portion of that rule for the oil
and gas industry is to make sure we are
able to maintain our oil field exemption.
We had anticipated the rule would be released last October, but the final ruling has
been delayed, and we are uncertain when
we will see it and what its impact will be
on all commercial drivers.
Another issue for our industry that is
going to continue to present itself in
2012 and beyond is damage to county
roads from water hauling, fracturing,
and other oil and gas related activities.
This is very prevalent in the Eagle Ford
Shale play in Texas. We have addressed
it in the Magnolia, Ar., area, and it was an
issue in East Texas from the Haynesville
Shale play two years ago.
JANUARY 2012 243

American Oil and Gas Reporter - January 2012

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