American Oil and Gas Reporter - June 2015 - 114

ConventionCoverage: Texas Alliance of Energy Producers

Alliance Directors Focus
On Future Of Industry
By Bill Campbell

WICHITA FALLS, TX.-Even while
the 2015 Texas Legislature was in full
swing, the Texas Alliance of Energy Producers Board of Directors began casting
an eye toward the 2017 biennial session.
A statewide checkoff program to fund
the industry's public education endeavors
and a name change at the Texas Railroad
Commission are two issues likely to
resurface in two years, board members
were advised.
Meeting in conjunction with the 2015
Alliance Expo & Annual Meeting, held
April 21-22 at Wichita Falls' Multi-Purpose Events Center, association directors
also discussed federal income tax reform
and the Alliance's advocacy for crude
oil exports, and voted to appoint a strategic
planning committee to guide association
activities to the year 2020.
At its November 2014 meeting in Fort
Worth, the Alliance Board directed the
staff to explore bringing legislation to
create an oil and gas industry checkoff
to the state legislature (AOGR, December
2014, pg. 145). The starting point, reported
government relations adviser Bill Stevens,
was a checkoff bill modeled after the
Oklahoma Energy Resources Board and
passed by the 2001 Texas Legislature,
but subsequently vetoed by Governor
Rick Perry.
After some revisions, Stevens said the
Alliance took the proposed legislation to
other oil and gas industry associations in
Texas. "With the exception of the Panhandle Producers & Royalty Owners Association, we were soundly rejected," he
revealed.
So Alliance staff reworked it and tried
again, Stevens said. They calculated an
assessment of 0.03 percent on the wellhead
value of crude oil and natural gas would
raise $20 million a year, he detailed.
"We put a cap in place so that no company
would pay more than $100,000," he said.
"We changed the governance such that
anybody who paid the maximum would
be part of the board, along with representatives from each of the associations."
Once again, he confessed, "We were

soundly rejected across the board."
Opponents, Stevens recounted, questioned why the industry should tax itself,
and raised fears that lawmakers would
expropriate the funds. "Number three,"
he added, "very subtly, was who controlled
this. Many of the larger companies don't
want to see control outside their purview."
Despite not gaining the support needed
to move forward, Stevens remarked, "We
still have the legislation. We are looking
for a way to do it without government
oversight. We still believe there is a need
for a universal industry fund (to support)
communications."
Rename RRC
Alliance government relations and
legal adviser Gloria Leal noted that the
Texas House Energy Committee this year
was considering legislation that would
change the RRC's name to Texas Energy
Commission. She said a major stumbling
block to doing so was removed when
both a private attorney opinion and a

114 THE AMERICAN OIL & GAS REPORTER

Chairman George Rogers conducts the
association's Board of Directors meeting
in conjunction with the Texas Alliance
of Energy Producers' 2015 annual convention and expo, held April 21-22 at
the Multi-Purpose Events Center in Wichita Falls, Tx.

letter from the U.S. Environmental Protection Agency's Region VI administrator
concluded doing so would not open a
pathway for EPA to revoke the RRC's
primacy over Texas' underground injection
control program.
Nevertheless, she said, the legislation
was not expected to move this year. She
said opponents pointed to the RRC's
worldwide name recognition, while proponents-including two sitting commissioners-thought it old fashioned and noted
the RRC did not regulate railroads.
John Tintera, a former director of the
RRC's Oil & Gas Division and now regulatory adviser to the Alliance, offered
another reason to favor a name change.
He explained that doing so would require
amending the state's constitution. Pointing
out the RRC is to undergo its third sunset
review in 2017, Tintera reminded board
members that the 2011 Sunset Review
Commission recommended abolishing
the RRC and that the new commission
had been instructed to devise a plan for
assigning the RRC's duties to other state
agencies.
Since amending the constitution requires voter approval, Tintera suggested
an affirmative vote in November 2016
would "raise the bar" for a Sunset Commission that was hostile to the energy
business. "It is going to be hard for a
politician to abolish an agency the voters
have just voted to rename," he reasoned.
"That wouldn't sit well, and in my opinion
is why you have two commissioners supporting (a name change)."
In the end, the Alliance Board voted
to remain neutral on the subject.
Federal Issues
A top priority for the Alliance at the
federal level, emphasized President Alex
Mills, is defending the percentage depletion deduction, expensing of intangible
drilling costs, and the passive loss provisions for investors. "We contributed
$10,000 to the National Stripper Well
Association for a study on percentage
depletion," he reported (see "NSWA Defends Depletion Allowance," AOGR, February 2015).

American Oil and Gas Reporter - June 2015

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