American Oil and Gas Reporter - June 2016 - 108

ConventionCoverage: Texas Alliance of Energy Producers

LEFT: Alliance Chairman George Rogers congratulates Carroll
Laing (center) and Doyle Bentley (right) of Armour Petroleum for
winning the 2016 Operator/Producer of the Year. CENTER: Harold
Conner (right) of Energy Services Co. accepts the 2016 Service

as much as 4 Bcf/d during the next threefive years. "That is significant; 75 percent
of these are brand new, grass-roots projects,
and 25 percent are expansions," Hance
estimated. "This stealthy demand is slow
and steady, but it will provide a good
base load."
However, he explained, abnormally
mild winter temperatures amid an exceptionally warm El Niño phenomenon
had dampened the past winter's consumption by as much as 1 trillion cubic
feet. "On average, daily temperatures
were anywhere from three to nine degrees
warmer than normal from November
2015 through March 2016. This was the
warmest winter since 1895," Hance mused.
"On the heels of all the supply growth,
natural gas prices suffered."
Big Picture
Hance closed with a view to the longer
term in regard to crude oil, which showed
that, at the time of the Alliance convention,
the oil slump had lasted 20 months. "I
am 85 percent sure the low is in at $26 a
barrel," he posited. "The chart going back
to 1985 tells you we are roughly tied
with the second-longest contraction from
peak to trough."
Offering a glimpse into his firm's
forecasting technique, he pointed to a
preceding cycle, in which the 1990's
decade peak West Texas Intermediate
crude price was $41.15 and the low was
$10.35. The midpoint in that 10-year cycle-$25.75-may be instructive for the
low point in this one, he said, predicting
oil could rise to the low $50s during the
next several months, although he also
suggested it could dip briefly back into
the $30s as well.
Hance pointed out that crude producers
in the 1990s would have been thrilled to

Company of the Year from Rogers. RIGHT: Rogers bestows Senator
Tom Haywood Lifetime Achievement Awards on Representative
Phil King (left), R-Weatherford and Senator Craig Estes (right), RWichita Falls.

sell their oil at today's recovering prices,
although he acknowledged that companies'
costs had grown considerably in the in-

tervening years. "But," he concluded,
"we are bringing down the cost structure."
❒

IOGA NY Focuses On Pipeline
And Waste Management Issues
HAMBURG, N.Y.-While several oil
and natural gas bills remain on the calendar
at the New York statehouse, the proposals
are one-house bills unlikely to advance
to the governor's desk, assesses Brad
Gill, executive director of the Independent
Oil & Gas Association of New York.
"I talked with the assembly minority
office about three bills being considered.
Two have been brought up in the past
and IOGA NY opposed both of them, so
I once again conveyed our opposition,"
Gill says. Those bills are:
* A 4905, introduced by Assemblyman
Daniel O'Donnell, D-New York City,
would prohibit using flowback water from
wells for ice or sand control on highways.
Gill says the legislation is poorly worded
and relies on misguided definitions of
wastewater and production brine.
* A 6859, written by Assemblyman
Steve Englebright, D-East Setauket, seeks
to treat all waste from oil and gas activities
as hazardous if it meets the definition of
hazardous waste under the state's environmental conservation law.
A third bill, A 7986, introduced by
Assemblywoman Patricia Fahy, D-Albany,
changes notification requirements to first
responders by rail shippers transporting
oil through municipalities, Gill says. He
adds because it is a rail issue, IOGA NY
is taking a neutral position.

108 THE AMERICAN OIL & GAS REPORTER

According to Gill, those legislative
issues confronting New York's oil and
gas industry will be part of the agenda at
IOGA NY's 36th annual summer meeting,
set for July 13-14 at the Peek'n Peak Resort and Conference Center in Findley
Lake, N.Y.
In addition to monitoring legislative issues, Gill says IOGA NY supports a campaign opposing New York's plans to impose
a statewide $15 an hour minimum wage.
"Governor Cuomo has formed a commission to study business costs and the
liability of businesses in New York," Gill
adds. "IOGA NY signed on to a letter
urging the commission to look at all
kinds of inordinate business expenses in
New York, including workers' compensation reform and health insurance reform."
Greg Biryla, executive director of Unshackle Upstate, another signatory to the
letter expressing opposition to raising the
minimum wage, says the unprecedented
mandate will ensure that New York's
business climate remains one of the worst
in the nation. The letter says its signees
believe the 67 percent increase in minimum
wages would hurt the state's economy.
Operator Qualification
New York's Public Service Commission, in the name of pipeline safety, is re-

American Oil and Gas Reporter - June 2016

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