American Oil and Gas Reporter - April 2015 - 177

The battle between increasingly conservative House and Senate members and
newly elected Governor Tom Wolf is
likely to be the key fight in Pennsylvania,
predicts Dick Gmerek, president and
chief executive officer of Gmerek Government Relations. He delivered a political update during the Pennsylvania Independent Oil & Gas Association's winter
meeting.

a campaign to rally support for oil and gas
activities from other organizations and industries that will be affected by another
oil and gas downturn, including trucking
companies, hotels and restaurants.
"If you don't know your legislator
personally, you need to," D'Amico urged.
"You need to go to his office and say, 'I
am Joe Smith. I work in the oil and gas
industry. Right now, we are faced with a
horrible pricing scenario; we are losing
jobs. This industry kept the state from
being in an even worse financial state
than it is.' That is the message legislators
need to hear."
Many utilities and gas-reliant companies are hesitant to make plans for future
natural gas use, remembering earlier
decades when the United States was
threatened with gas shortages, D'Amico
said. That uncertainty exists today not
because of resource shortages, but because
lawmakers threaten to undercut the potential of the Marcellus and Utica shales,
he asserted.
"There is no reason for that uncertainty;
the gas is there," D'Amico said. "But
volatility scares manufacturers and users.
The government can do more harm to
our industry than anything we could possibly do. This has the potential to be
more harmful than environmental groups
trying to shut us down. Don't stand on
the sidelines and do nothing. Tell your
neighbors, your friends, your family: here
is the situation, this is the truth. Get out
and spread the message."
State Politics
Providing an overview of Pennsylvania

politics, Dick Gmerek, president and
chief executive officer of Gmerek Government Relations, pointed to the likelihood that an increasingly conservative
House and Senate would square off against
newly elected Democratic governor as
the key political battle. In the past, Republicans from southeast counties often
would join Democrats to advance measures, but the new political climate precludes that option, he said.
In contrast, Gmerek reported, the governor had surrounded himself with very
liberal Cabinet appointments and staff
members. "What does this mean for us?"
Gmerek posed. "It seems a litmus test,
unfortunately for us, is the severance tax.
It's hard to believe that these Republican
groups who have taken over the General
Assembly are just going to turn their
backs and say we are going to impose
billions of dollars in taxes."
As Pennsylvania seeks to close a $1.5
billion-$2.32 billion budget gap, rumors
are emerging in the statehouse that legislators also are considering personal income
or tobacco taxes, while the governor is
eyeing property tax relief, Gmerek reported. Complicating that picture is the
message presented in most state campaigns
regarding proposed increases in education
spending, raising the question of how
much revenue from a tax increase will
be devoted to the budget or schools, he
posed.
Wolf has not offered much information
about his severance tax proposal, including
the impact fee continuance, Gmerek assessed. "Local government groups want
to keep that impact fee," he said. "There
are nine severance tax bill proposals,
most introduced by Democrats. Some include conventional and unconventional
operations; some include the impact fee."
PIOGA is monitoring the 1,000 bills
already introduced and the 2,000 bills
legislators plan to offer, Gmerek reported.
Proposals include allowing royalty owners
to inspect production data, creating a
Penn Grade crude advisory committee
for unconventional drilling, setting private
water well construction standards and
expanding the one-call system.
Federal Legislation
Lifting the federal ban on crude exports
now is the Independent Petroleum Association of America's top issue, reported
IPAA Manager of Government Relations
Samantha McDonald.
"It comes down to market access,"
she said. "The United States has surpassed
Saudi Arabia and the Russian Federation
as the world's top oil and natural gas
producer. However, the nation's laws are
outdated. By lifting the ban, we will be

While the United States is seeing technological advances boost it into the
highest ranks of global oil and gas producers, its laws-including a federal ban
on crude exports-have not kept pace,
asserts Samantha McDonald, manager
of government relations for the Independent Petroleum Association of America. She was one of the speakers at the
Pennsylvania Independent Oil & Gas Association's winter meeting, held Feb. 2425 at the Seven Springs Mountain Resort
in Champion, Pa.

able to increase investment and free trade,
grow the economy, create new jobs, and
reduce America's need for foreign oil
from the Middle East."
IPAA is part of a collaborative effort
among producers striving to educate legislators on the importance of those exports,
she said, adding producers can expect to
hear a lot more about exports during the
next year.
Turning to the federal debt, McDonald
indicated, one key factor that often pushes
Congress to tackle energy issues is consumer unhappiness about high gasoline
prices. Under the current market conditions,
she predicted, federal legislators are unlikely to see much reason to undertake
comprehensive energy legislation.
However, increasing amounts of congressional oversight are likely, assisted
by the Republican takeover of the Senate,
she said. "While you may not see legislation
being signed into law, you will see additional letters going to individual agencies-Environmental Protection Agency,
Interior and Energy-and you will see individual questions during the budget
process. You will see appropriations bills
actually moving that contain riders near
and dear to our hearts," she offered.
With the GOP takeover of Senate
leadership positions, McDonald said a
number of committees important to oil
and gas operators had seen a shift in control. Senator James Inhofe, R-Ok., will
lead the Environment and Public Works
Committee, while Senator Lisa MurkowsAPRIL 2015 177



American Oil and Gas Reporter - April 2015

Table of Contents for the Digital Edition of American Oil and Gas Reporter - April 2015

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