American Oil and Gas Reporter - January 2016 - 120

ciation, Gun Owners of America, and
state advocacy groups are facing many
of the same public opposition battles that
we are. Wayne LaPierre, executive vice
president and chief executive officer of
the NRA, must face the same frustrations
that we do every morning-how to effectively educate and sway public opinion
in an ever-changing and increasingly
liberal society. Remember, I am not comparing two totally separate industries
here. I am simply making an observation
about the similarities of the challenges
faced by two industries.
Every morning when Wayne goes to
work, he must think many of the same
thoughts I have . . . how do we effectively
change public opinion about a long-standing American industry? How do we once
again become viewed as a good and beneficial part of our nation's heritage... and
future?
For the NRA, the "boogey word" is
"assault rifle" and for us it's "fracking."

The public dislikes each of those words,
yet most don't understand them. Sportsmen
and hunters have been villainized just
like well tenders, petroleum geologists
and engineers, and service company professionals when some people hear what
they do. Overwhelmingly, there is increasing public sentiment against muchneeded fossil fuels just as there is against
the law-abiding pro-gun community.
Frustrations abound in many industries today when battling misdirected
public sentiment that trickles up to lawmakers and corrupt politicians, and ultimately results in nonsensical and excessive regulations being enforced by
incompetent bureaucrats and government
automatons with little practical experience, who don't know industries as their
members do.
IOGA NY has allocated millions of
dollars toward its legislative, regulatory
and public education efforts over the past
six years in hopes of moving the needle

Independent Oil And
Gas Association of
West Virginia
JON HILDRETH
President
megan Oil & Gas Company Inc.
Spencer, W.V.

FROM THE PRESIDENT
The biggest obstacles for Appalachian
producers going into 2016 are low crude
oil and natural gas prices, and exposure
to a weak market with little price protection through hedging. Lack of cash flow
virtually has halted growth in its tracks,
and is forcing both producers and service
companies to lay off employees and
reduce investments drastically in order
to survive.
The tremendous growth of the Marcellus and Utica shales, supported by efficiencies in fracturing and completions,
resulted in a flood of gas that the midstream sector was unprepared to handle.
That resulted in a price crash.
One major system that many West
Virginia producers depend on because
of geography is Dominion Transmission
(DTI). The DTI gas index price per
MMBtu for September through November
ranged from $1.16 to $1.24.
Compounding the effects of these low
prices is that after deducting Gateway
firm and midstream gathering charges,

several producers, instead of receiving
meager checks, received statements because the fees and transportation costs
exceeded the index price.
The Independent Oil and Gas Association of West Virginia has pursued remedies vigorously, and has presented options
that would help enable producers to
survive the next two or three years. Those
have been turned down, and the association
is working to present a third option.
DTI did accept a much-lower increase
on the association's most recent negotiated
gathering rate agreement, and IOGAWV
recognizes and appreciates the company's
consideration of the economics involved.
DTI is building several billion-dollar infrastructure projects to move gas to additional markets, with in-service dates ranging from 2017 to 2019. The problem is,
many operators will be in dire straits in
2016.
Unintended Consequences

120 THE AMERICAN OIL & GAS REPORTER

The Aboveground Storage Tank Act

of public opinion in our favor. Unfortunately, that needle moved against us by a
half a percent during that time-not because
of poor execution or the quality of the
initiatives, but because of a culture unwilling to be educated and not wanting
to accept the inconvenient truth that the
oil and gas industry, when allowed to do
what it does best, has raised the quality
of living for numerous societies around
the world.
Can you tell I am frustrated? I know
you all are too. My hope is that we can
keep it all in perspective, keep our heads
held high, and know that what we do is
right and good, despite many people condemning us for it. I, along with IOGA
NY's members and Board of Directors,
will keep up the good fight in New York
as long as we possibly can, and hope that
our torch will be passed to a new generation of oilfield workers who ultimately
will prevail for the good of our great
nation.
❒
(AST) continues to plague the West Virginia oil and gas industry. IOGAWV initiated intense grass-roots lobbying and
educational campaigns in the fall of 2014
to come up with a bill to establish that
oil and brine tanks posed little threat to
public water intakes, and were regulated
adequately by state and federal programs.
The campaigns successfully contrasted
the industry's tank contents to the watersoluble chemical that leaked from the
Freedom Industry site on the Elk River
in 2014.
The West Virginia Legislature recognized the AST bill's overreach, and passed
legislation to mitigate the unintended
consequences and great expenses imposed
on an industry with a great safety record.
But, those legislators are not very happy
with the unintended consequences that
will result from the new regulations proposed by the state Department of Environmental Protection. IOGAWV's Governmental and Environmental Affairs
Committee will work through the upcoming session to try to balance the DEP
rules with the original intention of the
AST bill.
IOGAWV is monitoring closely local
rules and ordinances to determine if they
are unconstitutional. Any disruption of
operations adds cost to an industry that
can't afford additional layer on layer of
piecemeal, sometimes conflicting, regulations. Well operators require standards
of operation carefully crafted by sound
minds and science, which is a job that is
best implemented by the state.
❒
American Oil and Gas Reporter - January 2016

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