American Oil and Gas Reporter - April 2016 - 90

ConventionSection: Kansas Independent Oil & Gas Association
Kansas Coal
Natural gas-fired electric generation
stations continue to displace their coalfired counterparts in Kansas and across
the country, Cross says, citing EIA data
about the 2015 retirements of nearly 18
gigawatts of coal-fired electric capacity,
including three Kansas City Power &
Light stations and another three Westar
Energy sites in Kansas.
"One of the benefits of a natural gasfired plant is that it reduces emissions, but
the Obama administration still does not
like natural gas," Cross observes. "If this
administration would allow more natural

gas use, it would greatly increase demand."
As the nation increases its reliance on
wind and solar power, he points out that
natural gas remains the backup generating
fuel of choice, with gas-fired electric
generation available almost instantly when
the renewable sources fade.
Natural gas and the renewables industry
will be on the Great Bend meeting agenda,
Cross says, with Adam Beren, chairman
of KIOGA's Electric Power Committee,
scheduled to bring members up to date
on discussions between the association
and Sunflower Electric Power Corporation
Inc. regarding how the state's cooperatives

are helping natural gas producers.
"The association has met with several
electric cooperatives over the past year
to talk about electric rate issues. Every
operator is looking to reduce operating
expenses, and certainly electric rates are
a major expense on oil and gas leases.
KIOGA has been expressing members'
concerns about those rates," he says.
In addition to presentations by Buchanan
and Beren, Cross says the midyear meeting
will offer tours of the Haz-Mat Response
facility and Rosewood Winery in Great
Bend. He adds the meeting also will offer
trade booths and exhibitors.
❒

Budget Issues Keep Legislators Busy
TOPEKA, KS.-For those looking for
silver linings in dark clouds, consider how
the budget gap in Kansas is lessening state
intrusions into oil and gas operations.
The final budget passed by the Kansas
House and Senate early in 2016 included
a $6.5 million ending balance for this
fiscal year and $89 million for 2017.
However, that legislative action took place
before the state Revenue Estimating
Group's final projection, which shows
Kansas revenues down $56 million, reports
Edward Cross, president of the Kansas
Independent Oil & Gas Association.
Governor Sam Brownback's response
includes ordering a 3 percent cut to

Kansas universities and a state-funded
efficiency study. According to the state
website, an outside consulting group is
offering 105 recommendations for cutting
state spending, and projects Kansas could
save more than $2 billion over the next
five years.
"I have not seen any recommendations
that target oil and gas," Cross says. "Fortunately, most legislators recognize that
this is a very difficult time for the industry.
I have given several presentations at the
statehouse about the impact of these low
prices on the Kansas oil and gas industry.
If oil prices still were above $100 a
barrel, the industry probably would be a

target, but it is not."
Cross says all state agencies remain
concerned about possible budget cuts,
especially in light of a Kansas Supreme
Court decision on school finance that
may force the state to spend more on education. One legislative proposal would
revise the tax exemption for limited lia-

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American Oil and Gas Reporter - April 2016

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