American Oil and Gas Reporter - January 2017 - 116

ConventionSection: Pennsylvania Independent Oil & Gas Association
Traditionally, Weaver notes, PIOGA's
winter meetings have focused on environmental issues. Although the convention
will cover those, he says PIOGA intends

to broaden the scope this year. "We are
going to offer an economic analysis also,
get an overview of where things stand
nationally, and hear from end-users," he

reveals. "We are trying to fish in different
ponds and bring in a variety of speakers
so that people have a well-rounded day."
❒

Pennsylvania Challenges Still Abound
WEXFORD, PA.-Some pundits and
candidates in recent decades have categorized Pennsylvania as a swing state,
but its color on the electoral map never
changed. After the votes were counted in
every presidential election since 1992,
the Keystone State turned Democratic
blue.
Therefore, one could hardly blame
Pennsylvania Independent Oil & Gas Association President and Executive Director
Dan Weaver for doubting his home state
would show up Republican red on the
2016 electoral map. He had encountered
predictions that Republican nominee Donald Trump could win Pennsylvania's 20
electoral votes, Weaver says, but he never
really believed it. But as he watched the
election results on television, he recalls,
the seemingly impossible transpired.
"When our state switched from blue
to red, you could have knocked me over
with a feather," Weaver laughs.
PIOGA Chairman Gary E. Slagel, a
government affairs specialist for Steptoe
& Johnson in Southpointe, Pa., says he
did not see it coming either.
"No, not at all," he admits. "I was as
surprised as anyone. The local polls we
were seeing all indicated Hillary Clinton
had done a sufficient job in Pennsylvania
and was going to walk away with the
race here, as Democrats have done for
years. When she didn't, I absolutely was
shocked."
A Microcosm
According to Weaver, in many years,
the Philadelphia and Pittsburgh metropolitan areas gave enough of their votes
to Democratic presidential candidates to
completely overwhelm the state's more
Republican rural regions. "This year, our
state mirrored what went on at the national
level," he characterizes. "There was a
great deal of rural turnout, and all these
people were voting Republican."
But it was not only the farms and
small towns, Slagel observes. Even returns
from the northern Allegheny County suburbs near Pittsburgh, were surprisingly
red, he says.
"I went through the results," Slagel

recounts. "Trump won virtually every
voting district in my borough, Franklin
Park, and all those surrounding it. There
are a lot of white-collar Millennials and
Generation Xers here, and I thought most
of them basically were going to line up
behind Hillary."
Meanwhile, helping seal the deal for
blue-collar voters, Weaver suggests, was
their deduction that green groups' antidevelopment agenda took priority with
Democratic policymakers over job creation. "I think that was a huge factor," he
suggests. "The Democrats seem to have
strayed from their foundation. A lot of
blue-collar workers feel slighted. (Green
activists) can protest everything, but what
good does that do if people don't have a
place to work?"
In December, as Trump announced
his cabinet nominations, Weaver said he
grew increasingly encouraged. "Trump
is bringing in businesspeople," he affirmed.
"These are people who understand the
need to truly investigate and understand
whether a given regulation from the Environmental Protection Agency is necessary. It will be fantastic if EPA decides
to relax or hold unneeded regulations."
A number of the Obama administration's regulatory initiatives originated in
executive orders or were based on statutorily flimsy foundations, Slagel assesses.
"There is a lot of hope that many of
those can be reversed by the Trump administration," he quips.
2017 General Assembly
November's election also brought good
news for the Republican majorities in
both chambers of the Pennsylvania General
Assembly, Slagel reports. Even so, he
adds, their enthusiasm may be tempered
somewhat by the state's budget crisis,
which projects a revenue deficit that will
be even worse than the current 2016-17
deficit.
Governor Tom Wolf has sought to impose a severance tax on Pennsylvania oil
and gas production since he entered office,
and is likely to continue offering that as
a partial solution, Slagel predicts. "Obviously, we don't think it is a solution,"

116 THE AMERICAN OIL & GAS REPORTER

he comments, "and it would make the
operating environment in Pennsylvania
even more difficult."
"There already are plans to bring back
the severance tax discussion right away,"
Weaver confirms. "When we heard the
state was dealing with a budget hole of
almost $2 billion, we knew that discussion
was on the horizon."
Therefore, they say, PIOGA expects
to spend a great deal of time addressing
the matter. "We are going to make sure
members in the House and Senate are
fully educated on any downside associated
with imposing an additional tax, on top
of the existing impact fee, on the industry,"
Slagel vows. "We need to defuse any notion they may have to move forward with
something regardless of the impact it will
have on our recovery industry."
Efforts to pass a law establishing how
Pennsylvania's minimum royalty is calculated are another matter PIOGA expects
to confront, Weaver says. Contractual integrity is a foundational principle, he observes, but the implications of passing
any laws to revise effective contracts also
are very practical. "Aside from violating
the constitution, that would make it possible to basically void every contract ever
signed," he muses. "Do we really want
to open that Pandora's box?"
Unfortunately, he says, many minimum
royalty bill backers do not seem to recognize that, because they are focused on
getting back at corporations they feel
have taken advantage of mineral owners
by deducting expenses for which they
should not be charged. "It would guarantee
a minimum profit," Weaver reflects. "A
mineral owner who signs a one-eighth
royalty contract is a one-eighth partner
in that well."
Weaver credits his predecessor, longtime PIOGA President and Executive Director Louis D'Amico, for pointing out
that natural gas sales still were federally
regulated when Pennsylvania passed its
minimum royalty act in the 1980s. "Producers did not have all these gathering or
processing costs," Weaver recounts. "Utilities basically ran a pipeline to our wells,
we would plug them in, and off went the

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