American Oil and Gas Reporter - February 2016 - 77

ConventionSection: Texas Independent Producers & Royalty Owners

Texas Looking Closer At
New Federal Rules
By Danny Boyd
Special Correspondent
AUSTIN, TX.-Members of the Texas
Independent Producers & Royalty Owners
Association face a litany of new federal
regulations and additional proposals that
TIPRO leaders insist may impose needless
harm and even critically hobble the Lone
Star State's economy.
As TIPRO prepares for its 70th annual
convention, to be held Feb. 22-24 at the
Grand Hyatt Hotel in San Antonio, the
group's staff and officers are busy ensuring
members have a voice in the conversation
surrounding proposed federal regulations
and their potential impact on the state.
New rules aiming to reduce methane
emissions are in the works, even in spite
of evidence demonstrating that such releases have declined, indicates TIPRO
Chairman Raymond Welder.
"Everyone, including the Environmental Protection Agency, has to admit that
ozone emissions have dropped by a third
since 1980, even though our country's
population has grown from 226 million
to 320 million," says Welder, president
and chief executive officer of Welder Exploration and Production Inc., based in
San Antonio. "Why such a stunning drop?
Because of increased natural gas use.
The EPA and entire federal government
need to decide what they want."
Regulations that needlessly hinder
drilling, completion and production operations will not allow for an increase in
natural gas production in an age that sees
global energy consumption continue to
climb, he warns. "The United States imports
energy from six countries, but we used to
import from 30," Welder observes. "It is a
remarkable decline. The industry has done
a phenomenal thing. The air is cleaner because of the industry. That is the reality."
Scrutinizing Federal Rules
During this year's interim session,
Texas lawmakers will review a number
of pressing statewide issues. State legislative committee charges run the gamut
from re-examining oil field theft prosecutions to scrutinizing groundwater pro-

tection standards, points out TIPRO President Ed Longanecker. But a major issue
before policymakers preparing for the
85th Legislature in January 2017 is the
potential impact of federal regulatory
proposals that TIPRO leaders insist will
weaken the entire state, and contribute
almost nothing to environmental conservation and public health.
Consequently, the Texas House of
Representatives has formed a new Committee on Federal Environmental Regulation to undertake a comprehensive
review of how the Obama administration's
environmental rules may affect Texas,
Longanecker explains.
The committee, chaired by Representative Geanie Morrison, R-Victoria, will
review both pending and finalized EPA
rules, including the Clean Power Plan,
National Ambient Air Quality Standards,
the definition of "Waters of the United
States" under the Clean Water Act, and
proposed standards for methane emissions.
Longanecker says that the Texas Senate
Natural Resources and Economic Development Committee is carrying out a
similar charge as well.
TIPRO provided oral comments at a
public hearing Sept. 13 in Dallas and later
filed combined written comments Dec. 4,
regarding three federal regulatory proposals
that are geared toward tightening controls
on methane emissions, Longanecker outlines. Although the oil and gas industry
supports 40 percent of the state's economy-and production has increased significantly during the past six years-methane
emissions have declined, TIPRO observes.
Moreover, the association indicates that
methane emissions from oil and gas production represent only 1.07 percent of
EPA's Greenhouse Gas Inventory.
"Emissions from oil and natural gas
development have fallen 35 percent since
2007, even as natural gas production increased 22 percent," Longanecker adds.
Official EPA data also demonstrate that
methane emissions from hydraulically
fractured gas wells have declined 73
percent between 2011 and 2013, with
total emissions from production, processing and transmission down from

170 million metric tons in 1990 to 148
million metric tons in 2013, the association notes.
Keeping Wells Viable
Oil and gas operators already have a financial incentive to curb methane emissions,
TIPRO says. It goes on to note that, although
EPA is considering an exclusion for marginal
wells, an exception that applies only to
wells that produce fewer than 15 barrels
of oil equivalent a day during their first 30
days of production fails to account for
normal production declines.
"It is not uncommon for a well to
produce above the 15 boe/d threshold
early in its life and then drop below it,"
TIPRO details. EPA must recognize that
emissions from oil and gas sources decline
with time, the group continues, which
should prompt the agency to focus on
areas in which the standards can offer
the most benefit. Adding a regulatory
burden quickly will make marginal production unprofitable, TIPRO cautions.
"Requiring emissions controls for existing marginal wells or for new wells
that later become marginal is a monumental waste of agency resources and an
unnecessary burden on producers," the
association asserts.
EPA also should refrain from regulating
existing sources, TIPRO urges, adding
that the proposals leave room for such a
contingency. "EPA's decision to regulate
methane directly under Section 111(b)
of the Clean Air Act potentially subjects
tens of thousands of existing wells to
regulation," the association comments.
"Such a move will require immense manpower with the economic burden outweighing any environmental benefits."
With regard to typical production fluctuations, TIPRO calls on EPA to avoid
unnecessary regulatory burdens by crafting
a standard that excludes operators whose
average well produces fewer than 15
boe/d.
TIPRO also insists state authority-
and not federal-should oversee activities
in their borders to the furthest extent possible. "The CAA was designed with this
in mind, giving states flexibility on how
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