American Oil and Gas Reporter - January 2017 - 122

Republican majorities, he adds, with the
former chamber losing one Republican
member and the Senate gaining four.
While West Virginia voters elected Democrat Jim Justice to the governor's
office, Burd says IOGAWV has had a
positive relationship with him, and expects
the new administration to continue its
pro-oil-and-gas stance. Burd notes that
increased energy production will be crucial
to state efforts to reduce its budget deficit.

IOGAWV remains cautious about what
may be introduced, and what it may have
to defend against as it proceeds into the
legislative session, Burd describes, adding,
"The association has a great lobbying team
in the industry. The industry has one voice
now, and it is very positive."
Freshwater reports the association will
continue its educational events aimed at
incoming legislators.
"The association really wants to look

at things that impact producers' economics,
proactively and offensively," he promises.
"Look at that workers' compensation payment-the association will monitor that
very closely, because in October producers
were getting $0.88 an Mcf prior to fees
and operating expenses, so we continue
to watch every penny. Everything that
the association can do to increase producers' economics is an IOGAWV priority
going forward."
❒

New Political Reality Holds Possibilities
SPENCER, W.V.-A new era is beginning in Washington, applauds J. Scott
Freshwater, president of the Independent
Oil & Gas Association of West Virginia.
With a new president moving into the
White House, he says he expects a large
number of regulations detrimental to the
energy industry and the overall business
sector to be modified or eliminated.
Freshwater, vice president of Reserve
Oil & Gas Inc. in Spencer, points to proposed pipeline safety regulations from
the Pipelines and Hazardous Materials
Safety Administration, and information
collection requests mandated under the
Environmental Protection Agency's
methane rules as merely two examples of
federal programs that have posed significant
threats to oil and natural gas producers.
"We literally were just weeks away
from those going into effect," he says.
"This is huge for the entire country-not
just West Virginia but for every producer.
We are very optimistic President-elect
Donald Trump understands the regulatory
burden our industry has been facing. I
think in time the regulatory climate will
improve. Hopefully, we can get back to a
partnering mentality with the regulators
instead of an us-versus-them mentality."
IOGAWV Executive Director Charlie
Burd says he has heard from many industry
sources that the nation now has a much
more business-friendly administration when
it comes to its dictates on emissions and
environmental matters. "I believe the administration coming in will be much more
reasonable. It is not necessarily buying
into the same global warming threat process
that the Democrats did, so we will see if
this helps us. I think there is a resounding
sigh of relief across most of the energy
sector that we have a different administration in Washington," he describes.
Burd advises it will take several months
of assessing the Trump administration's
actions before a proper judgment can be
made regarding its implications for the
oil and gas industry.
"IOGAWV continues to uphold the

standard business deductions, including
percentage depletion and intangible drilling
costs, and those types of deductions,"
Burd says. "Those tax treatments will
continue to help companies reinvest profits
back into drilling and production. I think
the Republican majority in Washington
will look at those tax treatments differently
than the outgoing administration has."
Waiting For Recovery
While there are reasons for optimism
in the political sphere, Freshwater says
economics remain the dominant voice in
oil field decisions. Citing the example of
Reserve Oil & Gas, he notes that natural
gas prices have not risen to the point
where he is able to increase the company's
drilling program.
"I want to see what is in gas storage
when we come out of the withdrawal season, because the nation is at record storage
highs. West Virginia has had a little cold
spell, but I really want to see what it
looks like in April," Freshwater says.
"For a target price, I am excited at anything over $2.00 an Mcf. We already are

seeing some major companies talking about
bringing rigs back, but I would say any
price over $3.00 would give people some
relief," he says. "At $4.00, I think they will
start thinking, 'this is not too bad.'"
When those economic triggers hit, the
workforce may not be up to expectations,
Freshwater suggests, adding that many
company owners have expressed that concern to him.
"There are workers available, yes, but
is the quality of the workforce what we
want?" he poses. "Our industry seeks a
level of professionalism and a safety culture, not just a 'get-it-done' mentality.
There are people who can get it done,
but I am not convinced we have developed
the leadership skills that the industry
needs to grow," he says.
In response, Freshwater says he is
leading an IOGAWV initiative to offer
members leadership skills, safety training
and other educational opportunities. He
points out that the association's February
winter meeting will offer a leadership
training course for supervisory level employees.
❒

Texas Alliance Still On Course
Regarding Long-Term Vision
FORT WORTH-The organization's
long-term trajectory, Texas Railroad Commission sunset review, and efforts to preserve oil and gas provisions in the federal
tax code were among the topics the Texas
Alliance of Energy Producers Board of
Directors tackled at its Nov. 15 meeting,
presided over by Chairman Robert Osborne, vice president of Cobra Oil &
Gas Corporation in Wichita Falls, Tx.
Another item on the agenda saw the
board consider and approve a resolution
about "regulation without resolution" that
vowed to stem the tide of unwarranted
federal regulations (see "Texas Alliance
Board Opposes Overreaching Federal

122 THE AMERICAN OIL & GAS REPORTER

Regulation," AOGR, December 2016).
According to a report from the Alliance,
those elected to new terms on the board
were Tanya Lindemann Choate of Lindemann Drilling, Tim Dame with Basic
Energy Services, Jim Finley from Finley
Resources, Butch Ford of Veritas Energy,
Justin Furnace from Hilcorp Energy Company, Todd Lovett of Mewbourne Oil
Company, P. Scott Martin of BlackBrush
Oil & Gas, James Mertz with Mertz Energy, Stphen Mizer from Jack L. Phillips
Company, Billy Osborn of W.B. Osborn
Oil & Gas, Robert Ravnaas with Cawley
Gillespie & Associates, and Byron Tuck
from Simon Energy Associates.

American Oil and Gas Reporter - January 2017

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