American Oil and Gas Reporter - January 2016 - 142

The Presidential Papers
sions.
The committee also will consider how
the Texas Emission Reduction Plan can
help mitigate new EPA rules' impact.
Likewise, the Texas Senate Natural Resources & Economic Development Committee will evaluate new federal mandates
and review expanding federal power's
implications for states' authority. Lawmakers will identify challenges these federal regulations may pose for our state,
and recommend legislative or constitutional action to protect Texas and allow
the state to maintain a vibrant economy.
Texas is fortunate to enjoy robust,
thorough and fair state governance, even
as it also allows operators to safely, efficiently and economically produce energy.
The Texas Railroad Commission, the
state's primary oil and gas regulator, has
done an admirable job through the years
in updating statewide rules to enhance
industry oversight, while also striking
the necessary balance to provide for ongoing exploration, drilling and production.
This regulatory framework has allowed
our state's energy industry to accomplish
record production and adopt technological
innovations, despite market volatility.
During a downturn such as this, independent oil and gas producers simply

must have a strong, consistent and reasonable regulatory environment if they
are to continue to develop affordable energy for consumers.
Continuing Consolidation
RRC statistics reveal the quantity of
Texas' named operators has fallen from
slightly fewer than 18,000 in 1985 to approximately 8,600 in 2015. A good argument can be made that such consolidation
is necessary. Still, government data show
that the state's top 10 producers produce
roughly 43 percent of the oil and more
than 52 percent of the natural gas, equivalent to almost half of production. Low
wellhead prices certainly are contributing
to this trend and prompting additional
consolidation.
Suppressed commodity prices also
have contributed to a drop in oil field
drilling. Although Texas' rig count still
represents nearly half of all active U.S.
rigs, drilling permits are down drastically.
The RRC issued a total of 822 original
drilling permits in October 2015, compared
with 3,046 in October 2014. This trend
will continue in 2016, unfortunately, even
as many analysts predict a rebound in
the next 12-18 months.
Following our predecessors, independent

Virginia Oil & Gas
Association
BRENT ARCHER
Director, Business Policy
Columbia Gas of Virginia
Chester, Va.

FROM THE PRESIDENT
During an internal planning meeting,
a question came up as to whether an industry event was good or bad news for
our company. After a long silence, someone answered "I guess it depends on
your perspective."
In many ways that answer sums the
state of the natural gas industry in Virginia
in 2015. Our producers continue to battle
head winds created by ultralow commodity prices and the never-ending attacks
by anti-fracture, anti-fossil-fuel organi-

zations.
From another perspective, customers
who use natural gas in homes, businesses
and industries are enjoying the benefits
of those gas costs in the form of lower
bills; that is, if they have access to natural
gas service. Large regions of Virginia today see no direct benefit from the natural
gas production revolution, although both
the interstate pipelines and Virginia's
distribution companies are working hard
to expand infrastructure into unserved

142 THE AMERICAN OIL & GAS REPORTER

producers must press on in spite of current
challenges. I am confident the oil and
natural gas industry, which is filled with
sincere, hardworking and innovative professionals, will persevere and again triumph.
Industry leaders remain optimistic that
commodity prices will recover, and our
sector will see another revival.
More than ever, participation in trade
associations such as the Texas Independent
Producers & Royalty Owners Association
is vital, particularly as producers look to
prevail through price fluctuations. With
more than 70 years' experience serving
the oil and gas industry, TIPRO remains
committed to working with government
officials, the public and other stakeholders
in a bipartisan effort to fight for ongoing
exploration, drilling and production in
our state and country.
As one of the nation's largest statewide
associations representing both independent
producers and royalty owners, TIPRO's
members include small family businesses;
the largest, publicly-traded independent
producers; and mineral owners; estates;
and trusts. TIPRO members account for
more than 85 percent of Texas natural
gas production and 70 percent of its oil
output, and they own millions of acres of
mineral interests across the state.
❒
areas. In the next five years, billions of
dollars in new capital will be invested to
modernize and expand natural gas infrastructure in the commonwealth, creating
additional opportunities for new gas service.
The Virginia Oil & Gas Association's
member companies are well aware that
the label of "clean fossil fuel" is anathema
to our opponents and that we can expect
continued attempts to restrict drilling and
the expanded use of natural gas. Increasingly, those challenges are taking place
at the local level, backed by groups outside
of Virginia. To that end, VOGA will continue its proactive, progressive approach
in educating policymakers and the public
about the benefits of natural gas, while
vocally defending our companies against
the spread of misinformation.
Good Legislation
On the policy front, Virginia's natural
gas industry enjoyed success in 2015 advancing the understanding of our industry
among public officials. In the 2015 Gen-

American Oil and Gas Reporter - January 2016

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