American Oil and Gas Reporter - December 2016 - 32

* Imposes a 55 percent supermajority requirement for proposed constitutional amendments.
Events earlier in the year saw Colorado's secretary of state reject a pair of
anti-oil-and-gas initiatives that failed
to gain sufficient signatures to appear on
the ballot. According to the Colorado Oil
& Gas Association, Initiative 75 was deceptively billed as a "local control" initiative that would have resulted in a
patchwork of regulations across the
state that would have given communities
the ability to ban fracturing and made it
very difficult to operate in others. And
Initiative 78 would have imposed a
2,500-foot setback that would have eliminated new drilling in 95 percent of
land in Colorado's top five oil-and-gasproducing counties, COGA says.
Meanwhile, according to the Public Affairs Research Council, Louisiana voters:
* Rejected a measure to eliminate a
deduction for federal income taxes on corporations' state tax returns and set a flat
rate;
* Approved a measure to create a revenue stabilization trust fund financed by

a portion of revenues from corporate and
mineral taxes to help pay for infrastructure
and pension liabilities; and
* Rejected a measure that would have
expanded legislators' ability to access
constitutionally protected funds during
shortfalls, but also would have established new parameters for five existing
funds.
Meanwhile, Louisiana's neighbor to the
north, Arkansas, approved all four of its
ballot measures, including Issue 3, an
amendment to the Arkansas Constitution. According to the University of
Arkansas Division of Agriculture, Research & Extension, Issue 3 was put forward with a stated intent to encourage employment and economic development.
The division explains that the amendment eliminates a cap equal to 5 percent
of state general revenues on the amount of
general obligation bonds the state may issue to finance economic development
projects. Issue 3 also includes a handful
of other provisions to expand local governments' and legislators' options regarding bonds, their repayment, and other aspects of economic development, UA's

Agriculture Division says.
Wyoming voters also amended their
state constitution with a vote in favor of
Amendment A, a budgetary matter that appeared on the 2016 ballot after two-thirds
of the 2015 Wyoming Legislature voted in
its favor.
The Petroleum Association of
Wyoming indicates Amendment A seeks
to maximize the state's $18 billion Permanent Mineral Trust Fund and other funds.
For years, PAW describes, the state has invested the fund to generate revenue, but after the last decade's historically low interest rates, the state estimated it missed out
on more than $2 billion in investment income. Amendment A does not alter how
Wyoming's funds are invested, PAW continues, but expands on the diversification
strategy employed in funds such as the
state's Wildlife and Natural Resource
Trust, Wyoming Public TV, and Wyoming
Children's Trust Fund.
Passing Amendment A, PAW predicts,
will help industry sectors avoid future tax
increases, as well as individuals avoid increased taxes on sales, property, and even
the possibility of a state income tax. ❒

Public Lands

BLM's Flaring Rule Prompts Lawsuit
WASHINGTON-The Western Energy
Alliance and Independent Petroleum Association of America are filing a legal challenge to the Bureau of Land Management's
final rule regulating venting and flaring
from oil and natural gas facilities on federal and tribal lands.
In their petition filed Nov. 15 in the U.S.
District Court in Wyoming, the groups call
the Methane and Waste Prevention Rule
a brand-new air quality regime that exceeds
the authority granted BLM by Congress.
The court filing argues Congress delegated exclusive authority to regulate air
quality under the Clean Air Act to the U.S.
Environmental Protection Agency, state
and local governments, and the tribes.
"The venting and flaring rule also is arbitrary and capricious, an abuse of discretion, not supported by the administrative
record, procedurally deficient, and does not
represent reasoned decision making," IPAA
and the Alliance state. "Among other
things, the venting and flaring rule places
arbitrary limits on flaring, relies on flawed
scientific, engineering and economic assumptions and methodologies to estimate
regulatory impacts, improperly relies on
EPA air quality rules and the administrative
record underlying those rules, which themselves are being litigated, and conflicts with
32 THE AMERICAN OIL & GAS REPORTER

or unlawfully usurps the primary jurisdiction of state and tribal governments."
Kathleen Sgamma, vice president of
government and public affairs for the Alliance, says both trade associations support
the goals of capturing greater quantities of
associated gas and reducing waste, "but
overreaching regulation that fails to acknowledge industry success is not the most
effective way to meet those goals."
She points out changes undertaken by
the natural gas industry have led to a 21
percent reduction in methane emissions
since 1990 at the same time production has
increased 47 percent. "We don't need federal rules to tell us to reduce methane emissions; it's the very product we are working so hard to capture and sell," Sgamma
says. "The venting and flaring rule is just
as egregious as BLM's hydraulic fracturing rule, and we are confident it will similarly be overturned by the courts."
IPAA Senior Vice President of Government Relations and Political Affairs Dan
Naatz says shortfalls in infrastructure
and gathering lines make it difficult for
producers to safely transport natural gas
to markets. He adds that independent
producers have shared their concerns
with and provided data to the Obama
White House repeatedly.

"This is an 11th-hour shot by an administration that doesn't fully understand
how its rules impact our business," Naatz
complains. "The continued regulatory
onslaught on American producers calls into
question the president's commitment to the
laws requiring mineral production on
federal lands, or whether the misguided
crusade to 'keep it in the ground' has overtaken this administration."
BLM's Rule
Interior Secretary Sally Jewells says
BLM is updating its 30-year-old regulations
governing natural gas venting, flaring and
leaking to help curb waste of public resources
as well as reducing methane emissions.
The rule requires producers to use
available technologies and processes to reduce by half methane flared from wells on
public and tribal lands, DOI says. Under
the rules, operators also must periodically inspect their facilities for leaks, and replace equipment that vents large quantities of gas.
Other parts of the rule require limited
venting from storage tanks and the use of
best practices to limit gas losses when removing liquids from wells.
DOI says the final rule also clarifies
when operators owe royalties on flared gas,



American Oil and Gas Reporter - December 2016

Table of Contents for the Digital Edition of American Oil and Gas Reporter - December 2016

Contents
American Oil and Gas Reporter - December 2016 - Cover1
American Oil and Gas Reporter - December 2016 - Cover2
American Oil and Gas Reporter - December 2016 - Contents
American Oil and Gas Reporter - December 2016 - 4
American Oil and Gas Reporter - December 2016 - 5
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American Oil and Gas Reporter - December 2016 - Cover3
American Oil and Gas Reporter - December 2016 - Cover4
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