American Oil and Gas Reporter - January 2015 - 212

The Presidential Papers
gas industry. Federal entities such as the
Environmental Protection Agency and
Department of Interior are in the process
of developing new rules for hydraulic
fracturing, as well as looking for additional
ways to control U.S. oil and gas operations.
Whether operating in Texas or elsewhere in the nation, independent producers
should note that effective Jan. 1, revised
air regulations were to take effect through
the EPA's comprehensive new source performance standards for the oil and natural
gas sector. The final rules include the
first federal emission standards for natural
gas wells that are hydraulically fractured,
along with requirements for several other
sources of emissions by the oil and gas
industry that currently are not regulated
at the federal level.
Throughout 2015, the U.S. Fish &
Wildlife Service also will keep reviewing
a long list of species under consideration
for endangered or threatened status. In
the state of Texas, there are more than
100 species awaiting a USFWS endangerment determination, many of which
can be found in the heart of Texas' shale
plays, including the prolific Eagle Ford
formation. Should USFWS elect to classify
just a few species as endangered or threatened, there could be an adverse impact
on Texas operators, businesses, landowners
and communities.
Members of the oil and gas industry,
especially our nation's smallest independent operators, understand that the
onslaught of regulations makes it all the
more challenging to remain in business
as they strive to keep up with the overly
burdensome, and often unnecessary, federal regulations instigated by this administration.

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New Era
With the start of the new year, a new
era began in Texas governance. Former
Attorney General Greg Abbott takes over
as the 48th governor of Texas, replacing
Rick Perry, who served in the position
for more than 14 years. Texas also welcomes a new lieutenant governor, railroad
commissioner, land commissioner, state
comptroller, attorney general and agriculture commissioner. Meanwhile, in the
legislature, seven officials are new to the
Texas Senate and 25 are new to the House
of Representatives.
This January, all 32 freshmen legislators
join their colleagues in Austin as the 84th
legislative session gets under way. An additional legislator will join both the House
and the Senate chambers once special
elections have been completed. As of December, special elections for these two
open seats had not yet been set.
The state's legislative session was to
kick off Jan. 13, marking the beginning
of an active season when lawmakers strive
to explore new initiatives and address
ongoing challenges. Hundreds of bills
have been filed and will be up for consideration by legislators this session, to
which TIPRO is closely tracking developments on those bills that could impact
members of the Texas oil and gas industry.
In 2015, the industry's legislative priorities remain focused on issues related
to water use and conservation, transportation infrastructure funding, endangered
species conservation reform, natural gas
flaring, and efforts to provide adequate
funding for the Texas Railroad Commission, the state agency responsible for regulating oil and gas activity in the Lone
Star State. Furthermore, with the vote in
Denton, Tx., to ban hydraulic fracturing,
it is possible lawmakers also will consider
legislation that would limit local efforts
to supersede the regulatory authority
granted to state agencies such as the RRC
as well as the Texas Commission on Environmental Quality.
Throughout the session, TIPRO will
work to ensure all state legislators are
educated on those issues pertaining to
oil and natural gas development, and it
will continue to emphasize the unmatched
economic contributions of the exploration,
production and development sector in
Texas.
During the 2014 general election, residents in the North Texas town of Denton

212 THE AMERICAN OIL & GAS REPORTER

approved a ballot proposition that banned
the use of hydraulic fracturing within
city limits. The first city in the state to
pass such a measure, the move will essentially stop all drilling in the town,
which sits atop the Barnett Shale formation.
Economic studies have shown that
with a local fracturing ban in place,
Denton and Texas would lose hundreds
of millions of dollars in gross product
over the next 10 years alone. Job creation
in the region also would be constrained,
while other economic opportunities were
restricted. The ban also jeopardizes much
needed tax revenue for local government
coffers, along with easy access to lowcost electricity.
Since the ban passed in November,
several state officials have spoken out
and expressed their discontent on the historic move. "As the senior energy regulator
in Texas, I am disappointed that Denton
voters fell prey to scare tactics and mischaracterizations of the truth in passing
the hydraulic fracturing ban," Railroad
Commissioner David Porter comments.
"Texas is a global energy leader and has
the best job climate in the country because
of our fair, even-handed regulatory environment. Bans based on misinformation-
instead of science and fact-potentially
threaten this energy renaissance and as a
result, the well-being of all Texans."
In the coming months, the oil and gas
industry will continue to evaluate options
on how to handle this critical issue. Meanwhile, lawsuits already have been filed
arguing the legality of such a ban, calling
on the courts to determine if such a ban
could even be adopted by municipal governments in Texas. In fact, the day after
the election, Texas Land Commissioner
Jerry Patterson wasted no time in challenging the ban on hydraulic fracturing
approved by Denton voters. By 7:51 a.m.
Wednesday, Nov. 5, attorneys for the land
commissioner had filed a lawsuit in a
Travis County court seeking a permanent
injunction against the arbitrary, capricious
and unreasonable prohibition.
Although he cites multiple reasons as
to why the fracturing ban is unconstitutional, Patterson said in November that
he filed the lawsuit primarily in defense
of the state's mineral interests. "This ban
on hydraulic fracturing is not constitutional
and it won't stand. If it was allowed to
be enforced, it would hurt the school-

American Oil and Gas Reporter - January 2015

Table of Contents for the Digital Edition of American Oil and Gas Reporter - January 2015