American Oil and Gas Reporter - November 2015 - 112

ConventionCoverage: Indiana Oil & Gas Association

Indiana Nears Finish Line
On Regulatory Rewrite
By Dan Larson
Special Correspondent

EVANSVILLE, IN.-As a major
rewrite of Indiana's oil and gas regulations
enters the final lap, industry representatives
are staying involved in the process while
keeping an eye on the nuts and bolts of
managing costs and operating efficiently,
state industry leaders say.
Those revisions constituted a significant
topic at the Indiana Oil & Gas Association's annual convention, held Oct. 8 at
Evansville's Tropicana Convention Center.
InOGA also heard from presenters on
subjects that included production efficiency, stimulation and mature wells, as
well as new federal air quality regulations.
The group also honored outstanding members and recognized exceptional operations.
Throughout the event, a common
theme resonated among speakers and exhibitors: Cut costs, know your operations,
and drive for efficiency.
Despite the challenges, optimism remains high, assessed InOGA President
Jeff Hoy, owner of JLH Geologic Consulting LLC in Mt. Vernon, In. "Our
members have been through these cycles
before," he assessed. "The good turnout
for this meeting tells me they are engaged
and interested in staying up to date."
During the banquet that concluded InOGA's convention, keynote speaker Steve
Goreham, an author and environmental
researcher, said climate change concerns
had driven many arguments against fossil
fuel use for decades, but that had intensified under the Obama administration,
which Goreham said had launched a war
on fossil fuels. He decried the spread of
climate alarmism, to which he said even
some prominent industry organizations
had fallen prey.
Rewriting the Rules
The InOGA annual meeting's working
session concluded with a panel discussion
about revisions to Indiana's oil and gas
regulations, which Herschel McDivitt,
director of the Indiana Department of
Natural Resources' Oil & Gas Division,

public comment and possible further revision. McDivitt suggested the rules could
take effect by January 2107.

InOGA President Jeff Hoy welcomes
members to the group's 2015 annual
convention. Hoy, a petroleum geologist
and owner of JLH Geologic Consulting
LLC in Mt. Vernon, In., predicted Illinois
Basin companies knew how to weather
challenging times.

described as the first significant amendments in more than a decade.
According to McDivitt, the rule making
was motivated partially by history. "It
has been a long time since rules were
thoroughly reviewed," he said. "We have
seen a few legislative tweaks during the
past 10 years, but most of the program
has remained the same for decades. This
is not only to impose new regulations.
There are many areas of interest to industry
on which our rules are silent. The new
rules address some of those."
Industry representatives have been active participants in the rule-making process,
Hoy reported. "This process has been
ongoing for two years and there have
been two comment periods," he detailed.
"There was ample time for members to
make known their concerns and we are
not finished yet."
The rule making added or revised
many definitions in the regulations to reflect evolving technologies, horizontal
drilling and fracturing techniques, and
other states' rules, McDivitt related. A
final draft of the rules was due for presentation to the state's Natural Resources
Commission at its November meeting,
he indicated, and then would be open for

112 THE AMERICAN OIL & GAS REPORTER

Production Reporting
During the panel discussion, speakers
noted that many of the new regulations
were not controversial and would offer
operators and investors greater certainty.
However, one area in which regulators
and many industry representatives differed
dealt with production reporting requirements.
Shawn Gallagher, vice president of
Gallagher Drilling and a member of the
industry group that met with regulators
during the rule-making process, said objections to production reporting requirements were common. "You expect different reactions to any new rule from
different parts of the industry," Gallagher
said. "Production reporting was one area
where we were all unhappy."
If approved, the rules will require operators to provide monthly production
reports annually by March 1. Section 25
indicates that production reports are to
include lease name, a purchaser or lease
number, identification of the pool, well
location, and identification of contributing
wells if production is commingled.
Unless they are held confidential, DNR
will make those reports public. "We understand operators would like to know
the production of a neighboring well, but
there are good reasons for reporting production," McDivitt suggested. "DNR is
the state's keeper of permanent records
on industry activity and, in the long run,
it is good for business.
"Indiana is one of the few states that
do not require production reporting," McDivitt added. "These days, there is an
expectation that information is available
to everyone and that records are transparent."
He added that the rules expanded the
allowance for confidential status in some
cases and that aggregate reporting could
reduce operators' administrative expense.
Getting STRONGER
As a comprehensive rewrite, the rule

American Oil and Gas Reporter - November 2015

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