American Oil and Gas Reporter - April 2016 - 96

ConventionSection: Tennessee Oil & Gas Association
off compressor site restrictions, she indicates.
"We and our state regulators came up
with some common-sense regulation for
hydraulic fracturing, instead of waiting
for environmentalists to dictate what we
were going to get and fighting back
against that," Reiley recalls. "Since we
passed regulations four years ago, we
have been very fortunate not to see a ton
of bills that target production, but now
our members have begun to see industry
opponents target transmission, especially
the compressor stations."
Ultimately, she explains, TOGA dislikes the concept of local regulatory restrictions and bans. "That is our position,"
Reiley affirms. "We do not want a patchwork of regulation across the state. We
want everybody playing on the same field
and do not want environmentalists finding
success in Nashville and then spreading
progressively farther into the oil field
until we see intrusions into production
issues. This is the prime time for industry
opponents to try to slip something through
the cracks, so it is more important than
ever to stay engaged."
The proposals to restrict compressor
sites could impede utility districts across
the state, Goodwin insists. "The proposals
are ridiculous," he assesses. "It seems to
have something to do with hydraulic fracturing becoming more of a back seat
issue during the current drilling environment. Some people want to come after
the oil and gas business in any way they
can, but we are still here and still doing
business."
Despite the existence of a few ill-considered proposals, the state's lawmakers
remain largely pro-business, Reiley maintains.
"We are cautiously optimistic that
everything will come out the way it needs
to," she says. "We are really fortunate to
have a very active membership, so when
legislators need to hear from experts, we
definitely have the resources for them."
Unnecessary Complications
On the regulatory front, the association
says it supports lower permitting fees for
reworking wells as members focus on
optimizing production, she reports.
"Like operators elsewhere in the country, our members are under financial constraints and looking to rework old wells,
as opposed to drilling new ones, but our
membership has run into an issue with
the permitting costs to run electric logs
96 THE AMERICAN OIL & GAS REPORTER

and perform other work such as acidizing,"
Reiley says. "The required permit is quite
expensive and only lasts for a calendar
year. We have begun to engage our regulators on changing the time frame. Instead
of a calendar year, maybe a 12-month
period generally would be better to reduce
permit costs and make reworking these
old wells more affordable."
The permitting structure evolved from
a switch in the state's regulatory structure,
which added about $1,500 to the permit
cost, Goodwin explains. Moreover, he
says, the permit application involves too
much paperwork.
TOGA also is working with regulators
to upgrade online digital databases that
contain permitting, lease information and
violations, Reiley says.
"We are working with regulators and
engaging some of our legislators to get
money to bring that online database into
the 21st century, making it more accessible
and more user-friendly," she describes.
Election Year
Throughout the general assembly session and beyond, TOGA will continue to
educate policymakers about industry issues, Laine says.
"Our members operate in the mountains
in a very isolated area in a very rural part
of the state, so the majority of people of
Tennessee do not know our state produces
oil or natural gas until we tell them," he

says. "We are a very long state. Memphis
is a few hundred miles from the oil field,
so many legislators are a long way from
where we are and know little about us. It
is our job to educate them. We typically
get very positive responses."
Meanwhile, Laine relates, lawmakers'
knowledge of the industry often depends
on their proximity to it. "Legislators in
our areas of operation are familiar with
us and very positive about issues we
bring to them."
During this election year, Laine predicts, legislators are likely to finish the
session before early May, which will
allow incumbents seeking re-election to
hit the campaign trail.
"Tennessee law prohibits legislators
from raising re-election funds during the
session, but their opponents can raise
money," he observes. "They want to get
out and start raising campaign money,
which usually means election year sessions
are shorter."
The association remains optimistic the
election results will not cause the general
assembly to swerve from its pro-business
outlook, Reiley says. "I know some of
our oil field area legislators have token
opposition, and anything can happen
nowadays, but I think most lawmakers
from producing areas are extremely constituent-minded and have done great jobs
for their districts, whether the issue involves
oil and gas or something else," she says.❒

TOGA Preparing To Celebrate
45 Years At Annual Conference
BRENTWOOD, TN.-The Tennessee
Oil & Gas Association is preparing to
celebrate its 45th annual convention, May
15-16 at the Park Vista Hotel in Gatlinburg,
Tn., giving TOGA members the opportunity to network, meet with regulators,
and get the latest information on issues
affecting their operations, says association
President Chuck Laine.
"Everybody likes to get together, so
we have plenty of time for camaraderie
and for everybody to find out what is
going on with everyone else," Laine says.
"We are expecting a good crowd, and we
are very excited."
The convention gives operators the
opportunity to foster bonds, notes TOGA
Chairman Will Goodwin, president of
W.D. Goodwin Inc. in Brentwood. "Our

members can interact with service company representatives and land folks, and
discuss potential deals and consider other
ways to continue moving forward and
weathering the storm," he says. "A lot of
folks who come to the meetings have
been members for quite some time and
have weathered these times before. Our
wells are shallow and our lifting costs
are relatively low, so a lot of our operators
are just hunkering down. The meeting
itself is more about what we can do with
each other and how we can collaborate
effectively with regulators."
A small group of independent operators
launched TOGA in 1971 to represent
their interests across the state, Laine reviews. Amid the current downturn, the
association continues to provide members

American Oil and Gas Reporter - April 2016

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