American Oil and Gas Reporter - November 2015 - 110

ConventionCoverage: Permian Basin Petroleum Association
the bill requires that local oversight be
reasonable.
Previously, municipalities assumed
that right under their policy powers, he
said. The early version of HB 40 did not
protect cities' police powers, Darby said,
but lawmakers spent hours listening to
the concerns of local leaders and made
changes. "A legislative process can't be
all way one way or the other," he advised.
"There has to be a consensus."

Interim Studies
During the interim, lawmakers also
may explore how Texas responds to proposed federal regulation of power plant
emissions, the Environmental Protection
Agency's methane requirements for oil
and gas, and the definition of waters subject to the federal Clean Water Act, panelists told PBPA.
Representative Dale said the power
plant proposal shifted base-load priority
from acquiring the lowest-cost resource
to the source with the least emissions,
which could make the state's power grid
less reliable and increase costs for consumers.
Mandates favoring renewable energy
such as wind and solar are costing consumers in other countries, he said, pointing
to Germany, which he said got 37 percent
of its power from alternative sources,
but was plagued by reliability issues and
soaring costs. "The president says (renewable mandates) may raise costs 17
percent in the United States," Dale re-

marked. "Germany has seen about a 300
percent increase, so hold on to your hats.
It has an outsized impact on Texas."
Darby said EPA's power plant regulation would cost Texas $29 billion
through 2020, with the average electric
bill rising an estimated $774. "Our manufacturers cannot afford that type of tariff
to support the rest of the country and put
our own manufacturers at a disadvantage,"
he said.
Senator Kel Seliger, R-Amarillo, whose
district includes portions of the Permian
Basin, said an interim study might be
conducted on how to adequately fund and
support functions of the Railroad Commission and the Department of Environmental Quality. Seliger added that he also
had requested a study on allocation wells.
"The issue came to the Senate as an
amendment on other legislation, but
failure to pass wasn't about substantive
concerns," he recalled. "People just didn't
understand it. There are a lot of complexities in dealing with the production
process, and economic and some legal
issues, too. We need to study (allocation
wells) because there are people who
think they are a good idea and essential
for the future, and a lot of people who
are opposed. If we are going to have an
active debate, it needs to be well informed."
Senator Charles Perry, R-Lubbock,
chairman of the Committee on Agriculture,
Water and Rural Affairs, said water issues
also might be an interim study topic, in-

Texas state lawmakers who reviewed the 2015 legislative session and looked forward to
the 2016 interim at the Permian Basin Petroleum Association's annual meeting, Oct. 15 in
Midland, are, from left: former Speaker Tom Craddick, R-Midland, who moderated the
panel; Representative Drew Darby, R-San Angelo; Senator Kel Seliger, R-Amarillo; Senator
Charles Perry, R-Lubbock; and Representative Tony Dale, R-Cedar Park.

110 THE AMERICAN OIL & GAS REPORTER

The Texas Railroad Commission is keeping a close watch on wastewater injections into the Ellenberger formations as
it continues to wrestle with the issue of
induced seismicity, seismologist Craig
Pearson advises the Permian Basin Petroleum Association.

cluding discussions on brackish water
and transporting water around the state.
"At some point, are we going to have
movement of water?" Perry wondered.
"We have to fix Texas water sources and
security for the next 50 years."
Seliger said the oil and gas industry
had been the most proactive of any in
addressing water issues without being
forced to do so by regulation or statute.

Taxes And Seismicity
Senator Perry mentioned that lawmakers this year reduced the state's franchise tax by 25 percent. He said the consensus in both chambers was that the
levy was a bad tax with winners and
losers, and was poorly conceived and
implemented. Doing away with the tax,
which generates about $9 billion for the
biennium, creates the additional challenge
of finding replacement revenue, he said.
State Representative Tom Craddick,
R-Midland, who moderated the legislative
panel, called the franchise tax "nasty."
Representative Darby said lawmakers
also would be monitoring the ongoing
study on seismic activity in Texas. Legislators set aside $4.5 million to study
seismic events. The funding also will
cover additional monitoring stations
around the state, he said.
"We are going to let the science and
the data drive the discussion," Darby
promised. "We are not going to let people
who are anti-fossil-fuels co-opt the data
and the discussion. That is going to be



American Oil and Gas Reporter - November 2015

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

Contents
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American Oil and Gas Reporter - November 2015 - Contents
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