American Oil and Gas Reporter - April 2015 - 46

Texas Tackles Local Ordinance Bills
AUSTIN, TX.-With the filing deadline
passed, Texas legislators are sorting
through more than 6,000 bills. The Texas
Alliance of Energy Producers and the
Texas Independent Producers & Royalty
Owners Association say they are promoting or monitoring a number of them.
Texas Alliance President Alex Mills
says the session's biggest topic has been
legislation intended to discourage or
prevent political subdivisions from passing ordinances more restrictive than
state law or regulations. The issue has
risen to prominence in the Lone Star
State especially since voters in Denton,
Tx., approved a ban on hydraulic fracturing in November (AOGR, Dec. 2014,
pg. 47).
"There are at least six bills in the
Senate and seven in the House on this issue," Mills observes. "We expect the
session to be different this year because
of the oil price decline and the Denton
vote, whereas normally, we would be
dealing with environmental issues, taxes
and water. But local ordinances have become the session's biggest issue."
TIPRO President Edward Longanecker and Chairman Raymond Welder III
testified before the House Energy Resources Committee, expressing the association's support for HB 40. Welder
says the proposed legislation "would
preserve control of municipalities by
providing local governments the ability
to address concerns related to surface
activity that is incidental to oil and gas
operations (such as noise, traffic and
lights), so long as rules and ordinances
are commercially reasonable."
"However, the bill also defines and
affirms the state's role in oil and gas regulation by expressing that municipalities
may not regulate aspects of oil and gas
activity that are under the exclusive jurisdiction of the state," Welder adds.
"This directly pertains to drilling, hydraulic
fracturing and production operations. In
doing so, the legislation prevents a 'patchwork' of ordinances and differing regulatory standards by local communities,
helping to ensure that there are not multiple
layers of conflicting regulations for oil
and gas producers to abide by from one
region of the state to the next.
"The regulatory framework put in
place by the Texas Legislature provides
for fair, appropriate oversight of energy
development in the Lone Star State," he
continues. "Without dependable and stable
regulations, Texas independent oil and
gas producers would shift their focus
outside the state, taking away the many

46 THE AMERICAN OIL & GAS REPORTER

consequential contributions made to the
state and local economies."
Welder says he strongly believes HB
40 strikes a "careful and functional balance
by allowing municipalities to still enact
reasonable regulations while also preserving the ability for oil and gas production to continue."
TIPRO confirms the Energy Committee
also took up HB 539, which relates to
the procedural requirements for adopting
a municipal regulation, limitation, or prohibition on the production, storage, or
transportation of oil or natural gas. The
association says it actively supports HB
539.

Other Legislation
Even so, Mills clarifies, the associations
have been tracking several tax-, waterand environmental-related bills, which
he says may hinder Texas' drilling operations.
Alliance legal and legislative counsel
Gloria Leal reports lawmakers have discussed several tax bills, but none directly
involve oil and gas producers. The Alliance

supports these bills, but it "obviously has
no dog in the fight," she comments. Nevertheless, she expresses concern that some
bills may shrink the tax base and leave
the oil and gas industry with a larger financial burden during a downturn.
Alliance government relations consultant Bill Stevens says water use is another prominent legislative issue because
the state's drought has not abated and
lakes are not filling.
Groundwater use remains a fragile
topic for industry representatives to raise
with legislators, Stevens acknowledges.
"Everyone scrutinizes water use during
a drought," he reflects. "We continue to
work with legislators and communities
on this issue by looking at possible brackish water use for fracturing and so forth.
But there are more than 50 water-use
bills this session."
Among them, he points to bills on
water governance, jurisdiction of river
authorities, water recycling, desalination,
water leasing, and limitations on a
landowner's use of water under "rule-ofcapture" (see story page 150).
Ì

Policy Issues On Fast-Forward
In 2015 Oklahoma Legislature
OKLAHOMA CITY-The Oklahoma
Independent Petroleum Association has
been tracking about 40 bills during the
2015 Oklahoma Legislature, says OIPA
Vice President of Legislative Affairs
James Roller, and although legislative
deadlines have rendered a number of
them dormant, a few others are moving
quickly.
With the state confronting a sizable
budget shortfall, he says lawmakers are
looking to leave themselves adequate
time to hammer out budget matters, and
so are speeding policy bills through the
process. "Typically, our major issues play
out in May, but it looks like we may be
done with some of these larger issues by
early- to mid-April," Roller assessed in
March. "Our priority bills-those dealing
with well spacing and local drilling bans-
continue to move quickly. They have negotiated language and the titles are on,
so they are live rounds."
He reports that Speaker of the House
Jeff Hickman, R-Fairview, and Senate
President Pro Tempore Brian Bingman,
R-Sapulpa, both have prioritized multiunit-well bills HB 2177 and SB 807.

Roller indicates that OIPA is urging legislative leaders to make sure the bills
have sufficient protections for smaller
operators and mineral owners. Roller
says SB 807 contains provisions for subsequent well elections in new pooling
orders for horizontal wells, which was
derived from language OIPA approved
in May 2014.
Meanwhile, he says, OIPA is supporting
HB 2178 and SB 809, which pre-empt
local actions over hydraulic fracturing and
other oil and gas operations. "In addition
to this issue, we are actively supporting
language that would define any effective
ban on activities as a taking," Roller adds.
"This would ensure that the subsurface
resource was valued and paid for, should
a city or other political subdivision try to
ban our ability to extract the resource."
Even after the policy bills' fates are
decided, Roller adds, OIPA plans to
follow legislators' budget discussions.
"We will pay close attention, mainly because gross production taxes make up
such a large percentage of our state budget," he relates. "The decrease in oil prices
really had an impact on that."
Ì



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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