American Oil and Gas Reporter - April 2015 - 167

ConventionCoverage: Illinois Oil & Gas Association

IOGA Turning Over New Leaf
With Regulatory Agency
By Corinne Westeman

EVANSVILLE, IN.-Not even Thor-
or at least "Snow Storm Thor"-could
keep Illinois Basin oil and gas producers
away from the 69th Annual Illinois Oil
& Gas Association Convention and Trade
Show. As a storm swept through the tristate region, attendees trekked through
snow as deep as 11 inches to arrive in
Evansville, which had eight inches of
snow itself.
Despite the weather and road conditions, the IOGA convention, held March
5-7 at The Centre, enjoyed a record 123
exhibitors and a steady attendance of
more than 1,000 industry members from
Illinois, Indiana, Kentucky, and surrounding states.
During the meeting, Executive Vice
President Brad Richards informed members of IOGA's ongoing legislative and
regulatory challenges. While Illinois' political environment improved for the industry with Governor Bruce Rauner's inauguration, Richards said the industry's
legislative and economic atmosphere continued to be cloudy.
There were not a lot of hot-button
issues in the legislature at the time,
Richards detailed, characterizing most
legislation as "clean-up, noncontroversial
items." However, one more important
issue is allowing an affidavit of nonproduction for orphaned wells so that those
wells could be put on the state's plugging
list or taken over, he said.
Richards commented that one of the
meeting's highlights was hosting Wayne
Rosenthal, director of the Illinois Department of Natural Resources, at IOGA's
Wildcatter Luncheon. "We never before
have had this kind of attention from or
this level of cooperation with IDNR,"
Richards clarified. "Now, in Rauner's
administration, several members of IDNR
have oil and gas backgrounds, and someone on the legal staff used to work in the
industry. That is a major change in circumstances in Illinois.
"Things are looking up," he added.

EID-Illinois
One item that sparked some discussion
among IOGA members was Richards'
question on how the association should
proceed with Energy in Depth-Illinois,
and IOGA's public and media outreach
efforts in general.
Richards admitted that while EID's
work had been effective, he expressed
concerns regarding the price needed to
maintain it. Because the member companies that sponsored EID's involvement
initially probably were not going to be
able to renew their financial support this
year, one member suggested-and Richards
agreed to look into-setting up an inhouse outreach campaign utilizing the
association's staff.
"EID-Illinois has done a lot of great
work with and for our association and
this industry," Richards praised. "But,
because of the economic atmosphere, we
are not sure if we can afford its services,
and we will look into alternatives such
as doing it in-house. That way, the efforts
will be more local, more direct between
the association and the other parties, and

Mike Mankowski, director of IDNR's Office
of Oil and Gas Resource Management,
addresses IOGA members during the
annual meeting's Legal & Legislative
session. He commented that, since the
new governor's inauguration, there had
been significant changes in the relationship between IDNR and the industry.

most likely less expensive."

Office Of Oil And Gas
Mike Mankowski, director of IDNR's
Office of Oil and Gas Resource Management, spoke during IOGA's Legal
and Legislative Committee session, commenting that there had been significant
changes in the relationships between the
department and industry.
Regarding the Office of Oil and Gas'
structure and size, Mankowski said he
hoped there would be enough money in
the budget to maintain current staff and
possibly expand clerical staff as needed.
He outlined several procedural changes
within the agency for IOGA members,
such as modifications to its review process,
technical hearings, and various forms,
including those for injection fluids.
He also commented on the state's oil
and gas production in 2014, and the
effects of the downturn going into 2015.
"In 2014, IDNR issued more than 1,200
permits, which was up from previous
years," he reported. "However, by the
end of February 2015, we could see the
effects of the downturn because we bottomed on production permits."
Now that the state's high-volume hydraulic fracturing regulations have been
finalized, Mankowski noted that only
one company had registered for HVHF
operations, although two more were pending. However, no one has submitted applications to conduct any fracturing operations in Illinois, and he said he suspected "companies lost interest when the
bottom fell out of the market."
Mankowski added that he hoped at
least one company would submit an application during the downturn so IDNR
would have time to work out any legal
challenges before dozens of companies
began applying to fracture.
"I am afraid IDNR will be sued if a
permit is denied, and it (definitely) will
be sued if it's issued," he clarified. "So
let us get it done and over with before
we have 50 operators wanting to drill.
It's better to do it now while we have the
time, rather than if we get back to $90
oil and IDNR is processing hundreds of
APRIL 2015 167



American Oil and Gas Reporter - April 2015

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