American Oil and Gas Reporter - January 2016 - 125

LIAISON COMMITTEE OF
COOPERATING
OIL & GAS ASSOCIATIONS
MIKE ELYEA
SENIOR VICE PRESIDENT
BURK ROYALTY CO.
WICHITA FALLS, TX.

Liaison Committee
Of Cooperating Oil
& Gas Associations

FROM THE CHAIRMAN
I am grateful for this opportunity to
share some thoughts about the oil and
natural gas industry, and our industry's
role moving forward.
The vast history of the independent
producer has been a voyage of discovery
and adaptation to different political and
economic environments. We are both the
foundation of and the future for American
energy.
The past several years have been a
challenging time for our industry. We
have been straining to adjust to a host of
potentially harmful issues that raise pointed
questions about our industry's future.
Federal tax proposals threaten independent
producers by attacking virtually every
provision in the federal tax code that encourages investment in American oil and
natural gas development. And expanding
federal regulation of oil and natural gas
production has put our industry under
siege from agencies that include the Environmental Protection Agency, Occupational Safety & Health Administration,
U.S. Fish & Wildlife Service, and more.
Promoting our goals and protecting our
interests has become more challenging.
The Actual Landscape
The question facing America is not
whether we will continue to need oil and
natural gas in the coming decades. Energy
demand continues to increase and we
must stop thinking about our energy resources as scarce or as a zero-sum game,
where we only can have more of one
type of energy if we have less of another.
We must be clear: According to the
government's own projections, even if
renewables grow significantly and energy
efficiency makes major advances, oil and
natural gas supply most of the energy we
use now and will continue to do so for
generations. I believe we must acknowledge this energy reality and make the
choices that will lead to a greater energy
future-one with more jobs, stronger economic growth, higher government revenues
and greater energy security.
This is vitally important for our nation

because of the unique and essential role
energy plays in our economy, and because
of our promising domestic resources.
Study after study shows we in the United
States can produce more of the energy
we need, and doing it here at home will
create hundreds of thousands of good
American jobs. Doing so also will help
to drive down energy and raw material
costs for manufacturers, reduce consumer
home heating and electricity costs, and
provide the local, state and federal governments billions in additional revenue.
Rational energy policy and commonsense regulatory structure are necessary
to support and encourage American energy
independence. We have the resources to
meet our energy challenges. With the
right leadership and vision, we can develop
rational energy policies and common
sense regulatory structures that can turn
challenges into great opportunities for
economic growth and energy security.
Energy policy would improve greatly
if policymakers accounted for the actual
energy landscape. Far too often, energy
legislation and policies are based on incorrect assumptions, such as the notion
that new, revolutionary technology is
right around the corner if only the federal
government provides sufficient mandates
and subsidies. Time after time, experience
has shown that the government cannot
force new technologies to the market.
A common-sense regulatory structure
is necessary to support and encourage
oil and natural gas development, rather
than one that imposes excessive or duplicative rules that provide no added benefit. The kind of regulatory structures
and oversight under which we operate
either can nurture this opportunity or kill
it.
We need a regulatory approach that
invites industry input and bases rule making on sound science, legitimate cost/benefit analyses and economic impact. We
need a new regulatory approach that
keeps energy development from falling
prey to regulatory strangulation. We need
an approach that encourages-not sup-

presses-business development.
Myth And Reality
We also need a tax system that welcomes capital investments in new projects
and energy production. Our future relies
on an approach that encourages businesses
to invest and grow in the United States.
Tax reform efforts likely will re-emerge
in 2016. Democrats and Republicans
alike express a strong sentiment in favor
of tax reform. The idea of lowering corporate and personal tax rates in exchange
for eliminating deductions resonates with
many.
We all must aggressively tell our story
about the independent oil and natural gas
industry's role and how percentage depletion and intangible drilling cost tax
provisions help us raise capital to support
American jobs and improve American
energy security. We must explain how
the rates could not be low enough to
offset the loss of these critical tax provisions, and how enacting such proposals
would diminish jobs, revenue, and energy
production.
Liaison Committee members also continue to tell the industry's story and bring
out the facts about hydraulic fracturing
to counteract propaganda from environmental extremists. We continue to provide
information to separate fact from fiction,
reality from myth, and proven practices
from hyperbole. And we provide information to demonstrate how responsibility
is an integral part of the independent oil
and natural gas industry's operations, decisions and considerations.
As our industry continues to face enormous challenges, an informed public is
as necessary as ever. Several Liaison
Committee members continue aggressive
communication and education campaigns
that target specific debates and educate
policymakers and the public on policy
issues. These efforts are bringing attention
to the facts through quantitative analyses
and increased information to policymakers,
media and the public.
Providing for our future energy needs
constitutes one of the 21st century's great
challenges. Oil and natural gas will continue to be the most critical and strategic
component of our nation's energy mix
for decades to come. America needs more
American oil. Our nation needs energy
policies that recognize these realities.
The Liaison Committee will continue
to work hard to help encourage sound
policies and good decisions. If our nation
makes the right decisions, all Americans
can make the most of the tremendous
opportunities that lie ahead.
❒
JANUARY 2016 125

American Oil and Gas Reporter - January 2016

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