American Oil and Gas Reporter - October 2015 - 119

ConventionCoverage: Eastern Kansas Oil & Gas Association
lesser prairie chicken as threatened under
the Endangered Species Act (see story,
page 20).
"We don't know where that is going
to go or what other courts will decide,
but to have one court come up with that
is a positive step," he said during EKOGA's 58th annual convention, held Sept.
16-17 at the Prairie Band Casino & Resort in Mayetta. "Now that there has
been rain in western Kansas, where
there has been drought the past eight
years, the bird population seems to be
coming up, as many biologists said it
would."
The Environmental Protection
Agency's conclusion that hydraulic fracturing does not threaten groundwater is
another dose of positive news, Bleakley
pointed out, as is bipartisan legislation in
Congress to lift the crude export ban.
Not all the news from Washington
was encouraging, Bleakley admitted. He
said EPA and the Army Corps of Engineers were moving ahead with plans to
expand the definition of waters of the
United States, which he described as having the potential to impact many previously
unaffected Kansas leases.
Congress and the Obama administration
also continue to debate changes to the
federal tax code, including the future of
intangible drilling costs and the percentage
depletion allowance, he said. "Many federal legislators don't think anything will
be acted on this year, but EKOGA will
keep a watchful eye because both provisions are important to the industry,"
Bleakley said.
Among the other presentations at the
meeting:
* EKOGA lobbyist Tom Bruno
warned the state budget could present a
serious problem in 2016.
* Steve Korf, District 3 supervisor
for the Oil & Gas Conservation Division
of the Kansas Corporation Commission,
looked at requirements for temporarily
abandoned wells and plugging proposals.
* Dwight Keen, a member of the
EKOGA Board of Directors, read a message from association president Steve
Stanfield, who missed the meeting because
of a business commitment.
Abandoned Wells

Bleakley reported the state's abandoned
oil and gas well remediation fund still
chiefly relied on industry money. Established in 1996, it initially received
$400,000 each from the Kansas Conser-

vation Fee fund, the state general fund,
water fund, and half of the federal royalty
revenues generated in Kansas. The state
has dropped its general and water funds
contribution, he said. The result, he
pointed out, was that Kansas would plug
fewer wells in the near term.
EKOGA and the Kansas Independent
Oil & Gas Association continue to work
with KCC staff on revising abandoned
well regulations, he said. The KCC has
begun sending U3-C forms for annual
pressure monitoring, fluid injection and
enhanced recovery to operators, he said.
Several companies have reported being
fined for mistakes such as typographical
errors on submitted forms, but most have
resolved those issues, Bleakley indicated.
Changes to the Kansas On-Line Automated Reporting (KOLAR) system also
continue, Bleakley said. "The hope is to
have all the KCC forms on KOLAR,
which is a pretty slick deal," he described.
"I believe the UC-3s are set to go on the
website, possibly the first part of next
year. EKOGA is talking with KCC about
how we can work those forms or educate
operators so the forms they turn in agree
with the permits."
Many Kansas operators do not fully
examine their permits after taking over a
lease, and have received warning notifications from the KCC about earlier UC3s or underground injection permit applications, he states. In several cases,
regulators have expressed concern about
injection pressures or volumes, Bleakley
added.
Seismic activity in south-central Kansas
and north-central Oklahoma has garnered
public attention, with initial concerns
about possible causes focused on horizontal drilling into the Mississippian
Lime, he said. Investigators next turned

to hydraulically fractured wells.
"Now people are looking at the highvolume, high-pressure disposal wells,"
Bleakley reported. "Those first and second
concerns have dropped away as potential
contributors to the seismic activity. The
injection wells now are being investigated,
and the U.S. Geological Survey has set
up a monitoring system."
Kansas regulators have requested
seismic information from well operators
in Sumner and Harper counties, he related, with initial analysis showing the
area is more faulted than many people
thought.
In response to the seismic events, the
state implemented a three-step program
to slowly decrease injected volumes, with
the final restriction limiting volumes to
1,000 barrels a day. The KCC staff has
filed a motion asking the commission to
extend those parameters for 180 days, he
added. "These actions seem to have had
an effect," Bleakley noted. "There are
still earthquakes and some seismic activity,
but those events are not as severe. There
still needs to be a lot of investigation as
to exactly why this is happening."
Budget Threat
Kansas operators enjoy a stable legislative environment on oil and gas issues,
praised Tom Bruno, although the EKOGA
lobbyist warned the state's budget situation
might create waves through 2016.
"The budget is the big gorilla. We
had an $800 million hole in Kansas last
year between what was budgeted and
what revenues came in," he said. "The
legislature made up that hole with $385
million worth of sweeps. Another big
chunk was made up through the largest
tax increase in Kansas history."
Governor Sam Brownback made other
adjustments in July, reducing spending

Rob Eberhart (left), an executive
member of the Eastern Kansas
Oil & Gas Association, talks
with David Bleakley before
Bleakley's presentation at the
EKOGA members meeting, part
of the annual convention held
Sept. 16-17. Bleakley, another
EKOGA executive member,
filled in for association President Steve Stanfield, who
missed the meeting because
of business commitments.

OCTOBER 2015 119

American Oil and Gas Reporter - October 2015

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